Richard Brubaker

Reports Indicate China's Ecosystem Is Too Far Gone to Support a Growing Economy

"China’s water and soil woes appear to have now reached the point at which food and water shortages leading to a health crisis could be possible at any moment, leading in turn to a reduction in GDP at the exact wrong time."

- this is already occuring in many areas of China. SEPA published a stuning report last year showing that China's GDP suffers greatly from environmental issues, there are regular water shortages/ outages in China, and with 70% of water unfit for INDUSTRIAL use, it is clearly impacting investment.

I am covering all this and more at Cleaner Greener China (cleanergreenerchina.co...) and All Roads Lead to China (allroadsleadtochina.co...)

r

China's Snowstorms Expose Infrastructure Shortcomings

This is a topic I have been covering for a while on All Roads Lead to China and it is an issue that I believe will not just catalyze infrastructure investment, but also energy investment.

While many have focused on China's push to purchase resources from around the world, where we are seeing the biggest hurdles is in the fact that China's domestic production and economy is far outstripping its local resources and logistics capabilities.

To learn more, I invite readers to view my post China’s Power Crisis. What is Happening. What the Impact Is/ Could be. And What You Should Do to learn more.

This is a problem that China has been fighting for 3 years, and unless heavy rains produce a glut of hydro capacity this spring, China will continue to experience power shortages through the summer.

The Inevitable Collapse of China's Banks

Aparently, the banks have not really learned much in the 5 years since they have "turned around".

Is China Growing Old Before It Grows Rich?

Richard,

sorry, I am not very tech savvy.

allroadsleadtochina.co... is the general site
allroadsleadtochina.co... is the site for Going Big on Going Gray
allroadsleadtochina.co... is the site for the map of graying trends in China

Thanks
rich

The Inevitable Collapse of China's Banks

As Lei points out, the people in Beijing are neither idiots nor are they going to always get it right... but they are trying.

This is an excellent post, and I commend Nicholas on his write up.

Through my previous work, I was involved on several of the early NPL project valuations and it was just plan scary. What has always been the biggest concern since that point is how a bank can go from 40% bad debt to 11% in just under 12 months. Well, in the middle of a property boom where the middle class looks for leverage, it is not difficult to see how the denominator on the equation was able to ridiculously fatten itself and bring those numbers down.

Remember that while the government did assign each big 4 bank a AMC to help clean up that bank's balance sheets, those AMCs are under PBOC. It is a shell game really where the PBOC, the AMCs, and the big 4 just hide their non-performing loans and wait for the day that they just magically disappear.

The first three years of resolving these assets properly (i.e. through public auction and private placement) were a mess. the data provided through the cautions was often incomplete and that drove valuations through the floor. Match that with the rule that you cannot sell State owned assets below book value, and you end up with failed auctions. CCB magically got around this by offering a buy back on assets without clean title 30 days after the auction. What happened? investors weighted those as 90% valuation levels (knowing the courts would never clean the assets) just to drive the 5% valuation to 45%. Amazingly, all three closed.

The problem root of the problem, as suggested above is that the banks do not have the internal structures in place for effective risk analysis and management, and that is before political favors are called in.
If the banks are unable to root out the rot, China is in for a rude awakening. At some point they will run out of lifelines.

Kudos to Nicholas

Is China Growing Old Before It Grows Rich?

China is an aging society, and many may be surprised to know that Shanghai is one of China's oldest with 18%+ of the population over the age of 60.

If you are interested in a raw look, please visit to see our recent article . We also have a map of China's aging population

It is an issue that everyone in China, yes.. that includes multinational companies, will have to worry about as the central government looks for solutions (look at new labor law, reform of health care system, clean up of pension scandals).