Dealing with the Bad Loans of the Chinese Banks

Chinese banks suffer from serious financial fragility manifested by high proportions of non-performing loans and low capital-adequacy ratios. A key policy introduced recently by the Chinese government to reduce financial risks is the establishment of four asset management companies (AMCs) for dealing with bad loans. Drawing on the experiences of the Resolution Trust Corporation in the United States and bank restructuring in the Central European transition economies, we argue that the original AMC design will not be successful in resolving the existing non-performing loans (NPLs) nor will it prevent the creation of new bad loans. We recommend a modification of the current proposal that redefines the relationships between the parent banks and the AMCs by transferring the deposits of problem enterprises along with their NPLs from parent banks to AMCs.http://deepblue.lib.umich.edu/bitstream/2027.42/39741/3/wp357.pd

Causes of and Remedies for the People’s Republic of China’s External Imbalances: The Role of Factor Market Distortion

The current account surplus of the People’s Republic of China (PRC) has drawn much foreign and domestic attention. This paper focuses on the reasons and remedies for the PRC’s current account surpluses. Rather than deploying the standard explanations, we argue that asymmetric market liberalization and the related factor market distortion is the root reason for the PRC’s external imbalances. These cost distortions have artificially lowered PRC production costs, raised profits, and improved their products’ international competitiveness which has not only stimulated the economy, but also brought about severe structural risks. We completed a crude estimation for factor cost distortions in the PRC during 2000–2009 which matched its current account surpluses quite well. In order to rebalance the economy, we recommend that the PRC should adopt a comprehensive reform package focusing on removing the factor market distortions.prc; current account surplus; economic rebalancing; exchange rate; factor market distortion

Dealing with the Bad Loans of the Chinese Banks

Chinese banks suffer from serious financial fragility manifested by high proportions of non-performing loans and low capital-adequacy ratios. A key policy introduced recently by the Chinese government to reduce financial risks is the establishment of four asset management companies (AMCs) for dealing with bad loans. Drawing on the experiences of the Resolution Trust Corporation in the United States and bank restructuring in the Central European transition economies, we argue that the original AMC design will not be successful in resolving the existing non-performing loans (NPLs) nor will it prevent the creation of new bad loans. We recommend a modification of the current proposal that redefines the relationships between the parent banks and the AMCs by transferring the deposits of problem enterprises along with their NPLs from parent banks to AMCs.bad loans, stae-owned banks, asset management companies, China

Dealing with Bad Loans of the Chinese Banks

China was the only major economy in East Asia that not only averted a currency crisis but also sustained relatively strong growth. This was largely attributable to its macroeconomic strengths when the crisis began, including sizeable current account surpluses, dominance of foreign direct investment in capital inflows, large foreign exchange reserves and control of the capital account. There are widespread signs, however, indicating that China’s banking sector is fragile. Such banks are not sustainable even in an autarchic economy, let alone that opening up of capital market is inevitable in the perceivable future. The first step of building a strong banking system is to deal with the bad loans

What Does the Lewis Turning Point Mean for China? A Computable General Equilibrium Analysis

We apply a computable general equilibrium framework to assess likely impacts of the Lewis turning point on China and the rest of the world. Modeling results suggest that China will probably transition from an abnormal economy to a normal economy with somewhat lower growth but higher inflation, which requires significant revision to the macroeconomic policy framework. China would lose competitiveness in laborintensive activities, its current account surplus should fall but overinvestment risk could rise. These changes in China should help improve other counties current accounts and boost lowcost countries production. The Lewis turning point, however, does not provide automatic solutions to some of the key challenges, such as service sector development and innovation capability. China will need to make serious policy efforts to avoid the socalled middle income trap.Lewis turning point, labor shortage, general equilibrium analysis, normal economy, middleâ€ÂÂincome trap

Protective effect of alcohol extract of Yulangsan leaf on chemically-induced liver injury in mice

Purpose: To investigate the protective effect of Millettia pulchra Kurz var. Laxior (Dunn) Z. Wei (Yulangsan) leaf (YLSL) on chemically-induced liver injury in mice.Methods: Models of carbon tetrachloride (CCl4) and D-galactosamine (D-GalN)-induced liver injury in Kunming mice were prepared by intraperitoneal injection. Sixty mice were randomly divided into normal saline (NS) group, liver-injury group, low-, medium- and high-dose YLSL groups (7.5, 15 and 30 g/kg dose, respectively), and biphenyldicarboxylate (BPDC) group, with 10 animals per group. Indices for liver, spleen and thymus were assessed. Serum aspartate transaminase (AST) and alanine aminotransferase (ALT) activities, levels of malondialdehyde (MDA) in liver tissues and reduced glutathione (GSH) as well as activities of superoxide dismutase (SOD) and glutathione peroxidase (GSH-Px) in liver tissue were assayed. Liver tissue damage was assessed histologically.Results: YLSL could significantly decrease the elevation of AST or ALT in liver injuries induced by CCl4 or D-GalN in mice, which showed a dose-effect relationship obviously. The high dose YLSL significantly decreased thymus weight relative to CCl4 and D-GalN (CCL4 CCL4+YLSL: 4.4213 ± 1.0544 vs 3.7120 ± 0.8534; D-GalN vs YLSL + D-GalN: 3.7272 ± 1.1655 vs 1.9548 ± 1.2996, p < 0.01). However, SOD activity was significantly increased (p < 0.01, p < 0.05). In treatment groups exposed to CCl4, GSH-Px activity was significantly increased (p < 0.01) and GSH levels decreased (middle dose group and positive control group). In treatment groups with D-GalN, GSH content was significantly increased (p < 0.01 or p < 0.05), while GSH-Px activity decreased (p <0.01).Conclusion: YLSL has protective effect against chemically-induced liver injury in mice. The mechanism may be related to attenuation of free radical-induced lipid peroxidation.Keywords: Millettia pulchra, Liver injury, Biochemical parameters, Thymus, Antioxidant, Dgalactosamine, Biphenyldicarboxylat