ECONOMY

The Rise of Chinese Banks

Will they outgrow American financial institutions?

Jan 5, 2009 | Updated: 5:39  p.m. ET Jan 5, 2009

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  • Posted By: RO in Reno @ 01/11/2009 10:31:02 AM

    It is only a matter of time now before the US Economy takes a back seat to the Chinese economy.
    The "Supply side" economic model promoted by Reagan and Bush actually works. Unfortunately it does not work for America.
    The fact is a certain percentage of every dollar spent flows to the supplier, who ultimately becomes wealthy. The supplier is always the manufacturer of the products bought. That manufacturer as we all know is now the Chinese and not the US.
    More and more Corporations simply profit from the markup on Chinese made products and as such they have become nothing more than a middle man or broker rather than the supplier even though they make claim to that title.

  • Posted By: provacateur @ 01/06/2009 4:52:44 AM

    "Still, a crisis is unlikely." Despite your article being a relatively fair simplification of China's banking changes over the past decade or so, I would argue that this throwaway comment indicates you still have much to learn about how China *actually* works. Gird yourself.

    • Posted By: alberta.xy @ 01/07/2009 11:20:13 PM

      I agree with you, but most people here don't understand what's going on in China. George Bush Sr. said: "I think it's not even questionable that people in China have more freedom than they used to have. Now some people [in the United States] don't understand that. They still regard the Chinese as a bunch of Communists. I don't think so."

      Compared with American banks, Chinese banks have their pros and cons.
      Cons: they have to give loans to nation-owned companies, regardless of their performance.
      Pros: they don't have highly-leveraged, risk financial instruments, e.g. mortgage-backed directives.
      average Chinese has a higher saving rate.

    • Posted By: alberta.xy @ 01/07/2009 11:15:29 PM

      I agree with you, but most people here just don't understand. George Bush Sr. said: "I think it's not even questionable that people in China have more freedom than they used to have. Now some people [in the United States] don't understand that. They still regard the Chinese as a bunch of Communists. I don't think so." As of the Chinese banks, they have both pros and cons compared with U.S banks.
      *Cons: they have to give loans to the nation owned companies, regardless of their performances.
      *Pros: they don't have highly-leveraged, risky financial instruments. China has a higher consumer saving rate.

  • Posted By: YashBudini @ 01/07/2009 1:01:17 PM

    Let's see; unsafe paint, unsafe milk, unsafe toys, safe banking. Seems inconsistent.

  • Posted By: OilBurns @ 01/06/2009 7:50:15 PM

    Banks generally reflect the attitude of consumers. A segment of US consumers spends way more than their income could support. As a result they borrow more to consume and service their debt. The banks are equally irresponsible for allowing these consumers rack up their credit card debt because they want the heft interest charges. CEO greed causes them to steer the banks to invest in risky lending practices because they are focused on their performance bonus, resulting in poor business practices by banks, which has contributed to the deterioration of their business. There is nothing more lethal than a combination of irresponsible lenders and borrowers. When the two tango, the economy trips. The US is headed towards becomming a second rate economic power. The Chinese simply have to stand by and let the US destroy its financial institutions and weaken its economy.

    • Posted By: peace1 @ 01/07/2009 5:28:16 AM

      the role of China in world economy is deceptive. it touts itself as a one nation, two policy country, but in reality, China is a communist nation, and although capitalism may thrive since it is an economic policy, capitalism in China will not behave in the same way as in democratic nations. Meaning, any economic policy under a different political system will behave in a different way,

  • Posted By: ShawnTX @ 01/06/2009 11:46:56 AM

    Hmmm I guess regulation works. So how about it Reagan? Is government still the problem and not the solution?

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