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China isn't far away from a serious sub-prime crisis [Copy link] 中文

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Post time 2008-3-24 07:43:53 |Display all floors
According to Yi Xianrong, an economist at the China Academy of Social Science, China's sub-prime crisis is worse than America's.

China doesn't have a credit rating system like America, so anyone can get a loan just by presenting an income statement. This is a problem beause people can easily get fake income statements. In 2004, a man living in Shanghai received 780 million yuan mortgage by providing fake income statements. This is just one example of many

Chinese banks don't even run a check for all mortgage applicants!

Eventually, within the next 2 years, China's going to have some trouble on its hands.

So, which will be the first to crash, China's stock or real estate markets?

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Post time 2008-3-24 13:17:19 |Display all floors

Reply #1 meiguodiyi's post

you mean Rmb780,000?

i doubt an individual can borrow Rmb789 MILLION!!!!

note: China is rapidly increasing it's per capita GNP. It is likely home prices will continue to be on the upward trend. Don't think problem can be serious. Amerikan problems is DESIGNED TO HAPPEN.


Green Dragon

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Post time 2008-3-24 16:47:14 |Display all floors
Why should anyone reply to a moron who can't spell America?

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Post time 2008-3-24 16:49:41 |Display all floors
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Roach Exterminator

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Post time 2008-3-24 17:17:04 |Display all floors

Blackstone Was Probably the Worst Incident So Far

Cheat me once, shame on you; cheat me again, shame on me.  

China's banks, being conservative and safety minded, unlike their reckless American counterparts, came out relatively unscathed in this American subprime debacle.  The Blackstone investment was probably the worst incident so far.  Since the Chinese banks' subprime exposure is collectively less than $5 billion (unlike the US financial institutions that have collectively over $2 Trillion in continued exposure), things are going to turn out well.

The world has eyes.  Which banks are prudent (the Chinese) and which are reckless (Western), will clearly show up on the balance sheets.

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Post time 2008-3-24 17:18:24 |Display all floors
Wow, if a prominent economist at the China Academy of Sciences says that China's housing loans are riskier than those in the US, the impending Chinese sub-prime crisis could be far worse. Oh no!

http://www.wealthdaily.com/articles/china-bubble-housing/1019

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Post time 2008-3-24 20:10:36 |Display all floors
Actually, there's no way to know whether Chinese banks came out unscathed, in fact, no one knows which American banks have serious issues yet. Since Chinese financial institutions were some of the major buyers of the securities in question, along with the Japanese and Koreans, it stands to reason that they are probably holding significant stocks of bad securities. Indeed, the Chinese government itself probably holds millions if not billions in potentially bad debt.

In fact, both the BOC and ICBC recently lost value over extremely large writedown rumors linked to subprime holdings. Other banks reported holding at least a billion dollars in subprime-affected debts. That's quite a lot of money for a Chinese bank to write down and a much more dangerous situation than if Citigroup does the same. Or, heck, if the Fed (who sends around 300 billion each year to the Treasury) had to write down its entire planned bailout.

[ Last edited by interesting at 2008-3-24 06:05 PM ]
"Justice prevails... evil justice."

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