Peek behind the Wizard of Oz’s (or Shanghai’s) curtain, and you’ll see that China’s double-digit percentage growth rates are an economic sleight of hand that have come at a price of escalating bad debt and non-performing loans. At the end of 2004, bank debt in China stood at $3.7 trillion — about twice the size of its GDP. That’s the highest proportion of any economy in the world. And that debt is lent almost entirely by state-owned banks — and over half of it by the Big Four. Today, Chinese state-owned enterprises [SOEs] owe banks over $2 trillion — about the size of the entire Chinese economy. And the amount of outstanding loans is growing by $500 billion each year.
None of this will shock any student of Communist economies. This is just the way financial institutions in “soft budget constraint” socialist economies work. That is the insight of Communist Eastern Europe’s only Nobel Prize caliber economist (and now Harvard professor), the Hungarian Janos Kornai. In socialist economies, cheap loans combined keep inefficient state-owned enterprise afloat. They also mean that a lot of goods are produced that shouldn’t be produced in the first place. Throw in China’s cheap labor and you see why the Chinese are selling Honda knock-off motorcycles at the price of their weight in scrap metal in Vietnam. This may lead to impressive rates of “top-line” economic growth in the medium term. But it also leads to the kind of massive misallocation of resources that eventually brought the Soviet Empire to its knees.
This makes the coming collapse of Chinese banks inevitable. And it won’t be the first time it will have happened. In the Asian crisis of 1997, two Guandong banks went belly up — exposing the massive non-performing loans given to the Chinese red chips floated in Hong Kong. Of course, investment bankers flogging shares of China’s state-owned banks will tell you “this time it’s different.” But ply them with drinks at a Hong Kong hotel bar and they’ll admit that much of the improvement in the balance sheets of China’s banks comes from re-classifying hundreds of billions’ worth of risky loans from “non-performing” to “special mention” — and not because of any genuine change in lending practices.
Será? Leia tudo.
p.s. viu a “restrição orçamentária não-rígida” de que sempre falo aí, leitor(a)? E tem gente que diz não ter idéia do que fazer em monografia. Pode não gostar de certos temas, mas que eles não faltam, isto é fato.