News Analysis
The state of banks in China dominates concerns about the economy and global growth. With pictures of angry crowds outside banks and tanks on the street in one city to quell discontent about being unable to withdraw funds, it bears asking what the true state of Chinese banks is.
Officially, Chinese banks are in fine shape. Nonperforming loans are low and are disposed of in a controlled manner. Banks remain comfortably within their regulatory limits of loan growth, and deposits continue to rise. However, as with all things China, a look behind the official statistics gives cause for concern….