Re: The Chinese sub-prime issue

On 8 30 , 11 37 , tSoonami <raymonds...@xxxxxxxxx> wrote:
As long as the economy in China is booming and the value of property
is going up, people will be continuing to "borrow" money and banks
will be continuing to lend money out. Isn't this kind of borrowing
what we call "Positive Leveraging" in Western management?

But to understand Chinese culture, as we all know, it is embarassing
to have any negative publicity. . So everytime you hear a news,
it's always a good news.

The HK culture is basically a Chinese culture, so is the one in
Taiwan, and in these two places unpleasant events are reported
sensationally to make newspapers sell. It is only in the mainland
where the government controls the press that mostly good news is
reported. So what you are talking about here is not Chinese culture
but the culture of the CCP.


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On Aug 30, 11:26 am, "fyfp...@xxxxxxxxx" <fyfp...@xxxxxxxxx> wrote:



On 8 30 , 10 15 , PaPaPeng <PaPaP...@xxxxxxxxx> wrote:

On Wed, 29 Aug 2007 19:02:54 -0700, "fyfp...@xxxxxxxxx"

<fyfp...@xxxxxxxxx> wrote:

This Chinese subprime market problem, hidden and not talked about as
such, has been caused by corrupt party officials borrowing billions of
dollars with little or no collateral to back up what they manage to
obtain from state-owned banks; the amount of the borrowed money is
frequently not returned. While subprime issue has come to light in an
open society like the US, this subprime issue in China is being hidden
and not mentioned but one of these days in one form or another it will
also surface....

To borrow money one must have use for it. Keeping it in a personal
account just earning interest is a very stupid way of investing and
stands a very good chance of being investigated for unexplained
wealth. China national cannot operate external (foreign) bank
accounts where one can hide ill gotten gains. Around the 80s corrupt
Chinese officials did indeed smuggle billions of dollars of stolen
public funds abroad. Its pretty had to do that now and the current US
subprime-crisis has no connection to China and corruption money.
There will undoubtedly be corruption cases in China. But each
corruption case will be particular to a specific project and therefore
isolated in damage when they are discovered. The similarity will be
to the ENRON or the WorldCom cases of corporate fraud. The US subprime
crisis is different in that it is systemic and spreads across the
whole financial system. The amounts involved can bring down the whole
financial system.

If the state owned banks in China were turned private and had to be
responsible for mending their holes, the scenario would be similar.
But then again you have the federal reserve in the US which stands
ready to 'inject' fund into the system to bail it out from time to
time. That sort of intervensionist measure is no different from what
Milton Friedman found disagreeable the HK gov did years ago in terms
of intervening into the local market.- Hide quoted text -

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