China bank mergers raise key questions about bad debt, Michael Pettis notes - Traders Union
China bank mergers raise key questions about bad debt, Michael Pettis notes - Traders Union
Source: Traders Union
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DW NOTE
Michael Pettis pointing at Chinese bank mergers means nonperforming loans are larger than officially reported. Beijing merges banks when the bad debt is too big to hide and too dangerous to write down honestly. The question isn't whether there's a solvency problem — it's how many years of phantom GDP growth those loans financed.