China Economics

China Chart Book

16 August, 2018

Bad loans on the rise

Commercial banks’ non-performing loans (NPL) rose by RMB183bn in Q2, the biggest increase in over a decade. On paper, bad loans now make up just under 2% of all loans, the highest ratio since the Global Financial Crisis. The official NPL ratio still looks implausibly low but the latest rise does suggest, alongside a recent jump in corporate bond defaults, that slowing growth is putting strain on corporate balance sheets. What’s more, the NPL ratio would have risen by a wider margin if banks hadn’

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