CHINA-ECONOMY
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AFP news agency quoting a Chinese official reported on June 23, 2016, that Chinese banks have written off more than $300 billion of bad loans in the past three years as Beijing seeks to reassure investors that the country can cope with its mounting debt problem. Wang Shengbang, a high-ranking official with the China Banking Regulatory Commission (CBRC), said the country's banks had seen their non-performing loan ratios rise consistently for four and a half years, reaching 1.75 percent at the end of March. But they were well-prepared to handle the losses and domestic lenders had written off two trillion yuan ($304 billion) of bad loans over the past three years. He said at the news briefing that "Current figures show the banking sector's operation is generally stable and the risks are under control." He added "The CBRC took precaution measures in advance and in 2011... required banks to set aside more in provisions while the economy was in an upturn cycle so that we were able to accomodate huge writedowns when the economy was in a downturn cycle,"
Separately, the Chinese government think tank the China Academy of Social Sciences (CASS) estimated.China's total debt hit 168.48 trillion yuan at the end of last year, equivalent to 249 percent of the national GDP. Li Yang, a senior CASS researcher said last week, that the most worrying risks lie in the non-financial corporate sector, particularly in state-owned enterprises (SOEs).
Wang Kebing of China's Finance Ministry said China's government debt ratio was 41.5 percent of GDP at the end of 2015 if contingent debt -- obligations that authorities are not liable for at present, but could become responsible for -- was included.
(Comment: US$ 300 billion is 3% of China's GDP.)
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