同時，美國《華爾街日報》(The Wall Street Journal)也在關注中國的「錢荒」問題。
Experts: China’s Credit Crunch is a Political Problem
Recently, China’s bank “cash shortage"has continued.
The Chinese Communist Party’s (CCP) Central Propaganda
Department (CPD) had sent an order to media and local CPD.
It instructed them to stop hyping up the shortage of cash.
Analysts said that China’s credit crunch is no longer an
economic problem, but a political problem.
How can this problem be resolved?
This is the dilemma for the CCP top leaders.
Let’s take a look what the experts say.
The Financial Times (FT) reported in Shanghai that
the CPD issued orders last week.
It instructed journalists of newspapers, TV stations and
local CPD to stop “hyping up"the so called cash crunch.
Instead, they need to spread the message that
China’s markets are well stocked with money.
The FT revealed that the CPD regularly sends
guidelines to media about sensitive political subjects,
and advises which words to avoid,
and how to frame their reporting.
However, it is rare for such instructions
to be sent to Financial media.
Bloomberg reported that the growth of Chinese banks’
earnings have been overshadowed by concerns that
new lending is being used to repay older debt,
and that a sharper slowdown in the economy
may trigger bankruptcies and defaults.
The report said that bad loans at China’s commercial
lenders have already climbed for six straight quarters.
It is the longest streak in at least nine years.
Non-performing loans rose 20% from a year earlier
to end of the first quarter to $86 billion.
Xie Tian, a professor at the Aiken School of Business
at the University of South Carolina:"This problem
epitomizes a reality of sharp opposition between
the CCP’s dictatorship and the Chinese people.
This problem is related to all people and involves money.
This problem can’t be hidden any more.
In fact, the Shanghai interbank interest rates have risen,
there is no way to cover it up."
Bloomberg said: Shares of Industrial & Commercial
Bank of China and its three largest local competitors –
China Construction Bank, Agricultural Bank and Bank of
China fell by an average of 12% in Hong Kong last month.
It erased all of this year’s gains.
Experts predict that China’s credit crunch, and loan
growth slowdown will further drag down the economy.
Such concerns can push away some global investors
from Chinese bank shares.
The Wall Street Journal (WSJ) is also concerned
about China’s credit crunch.
The WSJ reported that China’s Central Bank felt that
it has no way to solve the problem of cash shortage which
has catapulted interest rates to nose-bleeding highs,
during the past two weeks.
On 24th June, Chinese stocks posted their
worst one-day loss in nearly four years.
It contributed to a broad regional decline
in equities and commodity markets.
WSJ revealed data from an internal meeting
at China’s Central Bank.
It shows that the central bank had no way to deal with
what it saw as out-of-control credit growth.
Xie Tian pointed out that if the CCP wants to solve the
problem, it may have to possibly inject liquidity.
But, the amount required would require
several hundreds of billions to several trillions
to have the possibility of resolving the problem.
However, relatively speaking, it will bring a negative effect.
Xie Tian: “If several trillions or more in funds
are injected into the financial system,
the previous problem would be intensified
until the Chinese assets’bubble burst.
The infrastructure will lose control, credit will
become excessive, the problem has certainly been stoked.
If the situation remains unfunded the money shortage
will continue without injection of funds,
it will trigger the financial industry and banks
to collapse on a large-scale.
Thus, the CCP finds itself in a dilemma."
Xie Tian believes that the cash shortage isn’t only an
economic problem, it has transformed into political and social problems.
Xie Tian:"Actually, China’s credit crunch
revealed a critical issue, that is,
the interest groups oppose the Chinese people.
That means China’s wealth was stolen from the civilians.
It gathered into the hands of privileged groups,
this is a political issue.
It relates to the problem of China’s political system.
The CCP has dictatorial power, they can control the money in
their hands, and have caused the current economic problems."
Analysts say that although the CPD instructed
media to stop with the reporting of the credit crunch,
nevertheless it cannot be covered up.
Whether the Chinese people’s money can be
exploited or not, we will see.