China’s Loan Growth Isn’t Boosting My Confidence In China’s “Green Shoots” Michael Pettis

I wrote in February ( see Number Of The Day "Credit Explosion In China" ) "This almost surreal number is signalling a real panic among the leaders..." & "I wonder what percentage of the loans will default".... There is nothing to add ( except the percentage will be sky high UPDATE: See link about the Beijing housing frenzy)........ ........ The level of panic might explain why protectionism is on the rise.....Good luck to all the investors/experts ( probably 90 percent.... ) that still think China will lead the rest of the world out of the dark....The first link from Michael Pettis is a must read! He provides the best insight on China......

Ich schrieb im Februar ( siehe Number Of The Day "Credit Explosion In China" ) "Diese unheimliche Zahl signalisiert ne echte Panik der chinesischen Führung...." & "Möchte nicht wissen welcher Prozentsatz dieser Ausleihungen in 24 Monaten als notleidend deklariert werden muß......" Nach aktueller Datenlage ist dem wenig hinzuzufügen.... Höchstens die Gewissheit das die Panik noch zugenommen hat und das eine gigantische Zahl dieser Kredite implodieren wird ( Update : Bitte den Link zum Immomarkt in Bepinkg lesen )...Wie groß die Panik zu sein scheint kann man auch am zunehmenden Protektionismus erkennen......Wer noch immer auf China als große Hoffnung der Weltkonjunktur setzen möchte dem wünsche ich viel Glück......Sieht fast so aus als wenn China demnächst einen nicht geringen Teil der $ Reserven für das eigene Bankensystem & die Provinzen benötigt...... Empfehle einmal mehr den Link von Michael Pettis. Habe bisher keinen gefunden der einen besseren Einblick in das chinesische "Innenleben" offenbart. Und das i.d.R Monate bevor andere darüber berichten......

China’s loan growth isn’t boosting my confidence in China’s “green shoots” Michael Pettis!

New loans	2008	2009
January	804	1,600
February	243	1,100
March	286	1,900
April	464	591
May	319	665
June	332	1,200
Half year	2,448	7,056
July	382
August	272
September	378
October	182
November	478
December	772
Total	4,912

China Bank Lending Funneled Into Stocks, News Says Bloomberg

Chinese new bank loans worth about an estimated 1.16 trillion yuan ($170 billion) were invested in the stock market in the first five months of this year, China Business News reported, citing a government economist.

That’s 20 percent of the 5.8 trillion yuan loans banks extended in the period, the Shanghai-based newspaper said.

> By the way the index has now bubbled higher to 3.050....... Update:Bawang International IPO, a Chinese herbal shampoo maker, was 446 times subscribed & Coal trader China Qinfa Group IPO 96 Times Oversubscribed

> Der Index steht aktuell bei 3.050....... Update :Bawang International IPO, a Chinese herbal shampoo maker, was 446 times subscribed & Kohlehändler China Qinfa Group IPO 98-fach überzeichnet

Chinese Banks: "An Accident Waiting to Happen" Naked Capitalism

Note the phrase "able to bear". Fitch's "macro-prudential risk" indicator for China threatens to jump from category 1 (safe) to category 3 (Iceland, et al).

This is a surprise to me but Michael Pettis from Beijing University says China's public debt may be as high as 50pc-70pc of GDP when "correctly counted".


The regime is so hellbent on meeting its growth target of 8pc that it has given banks an implicit guarantee for what Fitch calls a "massive lending spree".

Bank exposure to corporate debt has reached $4,200bn. It is rising at a 30pc rate, even as profits contract at a 35pc rate...

Roll-over risk is rocketing.

China's monetary stimulus since November is arguably more extreme than the post-Lehman printing of the US Federal Reserve, though less obvious to the untrained eye....

Beijing housing bubble growing, says state media Marketwatch

Beijing's property prices are climbing at an unsustainable rate, with residential property in the city center leaping 6.5% in the past week alone, according to a report Friday in the state-run China Daily newspaper.

The report, which cited data from property broker Homelink, said some neighborhoods have seen demand for apartments at four times the number of units available.

"We used to talk about monthly price growth, but recently, it's more about daily change," the report quoted a Homelink broker as saying.

"The bidders have gone irrational. A bubble in Beijing's property market is definitely there," the report quoted Soho founder and Chief Executive Pan Shiyi as saying.

The report said other large cities across China were seeing a similar phenomenon, with industry leaders now worried that the market is priming for a big drop at some point in the future.

> I´ve written earlier about the CRE in Beijing ( see Beijing's Olympic Building Boom Becomes A Bust )....

> Hier ein paar Fakten zum Zustand des gewerblichen Immobiliensektors in Peking ( siehe Beijing's Olympic Building Boom Becomes A Bust )

By Rodman's calculations, 500 million square feet of commercial real estate has been developed in Beijing since 2006, more than all the office space in Manhattan. And that doesn't include huge projects developed by the government.

He says 100 million square feet of office space is vacant -- a 14-year supply if it filled up at the same rate as in the best years, 2004 through '06, when about 7 million square feet a year was leased.