Deep in the Chinese Ponzi Economy, Bad Loans Trade on Alibaba

It’s easier to get rid of them this way.
Deep in the Chinese Ponzi Economy, Bad Loans Trade on Alibaba
A teller counts yuan banknotes in a bank in Lianyungang, east China's Jiangsu province on August 11, 2015. STR/AFP/Getty Images
Valentin Schmid
|Updated:

The official data doesn’t look that bad—this is normal in China. Bad loans are only about 1.6 percent in total, compared to 1.18 percent in the United States. But then, the questions start: What is the real number?

The answer can only be higher, a lot higher. Investment bank CLSA estimates it could be as high as 8.1 percent for all bank loans. Compare this to bad loans in the United States of about 3 percent at the height of the financial crisis.

(St. Louis Fed)
St. Louis Fed
Valentin Schmid
Valentin Schmid
Author
Valentin Schmid is a former business editor for the Epoch Times. His areas of expertise include global macroeconomic trends and financial markets, China, and Bitcoin. Before joining the paper in 2012, he worked as a portfolio manager for BNP Paribas in Amsterdam, London, Paris, and Hong Kong.
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