Blizzardboy | A Kiwi in Japan

With Xinjiang being a vital part of China’s strategy in its relationship with Central Asia, and as a vitally important resource base, it comes as no surprise to hear that the Chinese Development Bank will make available an extra 60.5 billion RMB (7.5 billion US dollars) for development projects over the next five years.

Added to current lending of 55.3 billion RMB this will make around US$14 billion in loans extended in the Xinjiang region. With corruption and cronyism still a serious problem the real question is when will this all go bang. Expect to see 30-40% of this amount turn into bad loans.

The risk is that the situation will develop in much the same way as the world has seen in Japan. One can only hope that the state has the finances and the willingness to deal with this problem before it becomes a serious financial crisis for China Inc.

News source:

Development Bank loans heavily to resource-rich Xinjiang
www.chinaview.cn 2006-03-15 20:17:50

BEIJING, March 15 (Xinhuanet) — China Development Bank (CDB) has promised to issue 60.5 billion yuan (7.5 billion U.S. dollars) in loans for northwest China’s Xinjiang Uygur Autonomous Region in the coming five years, according to an agreement reached here Wednesday.

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