HONG KONG -- Nonperforming loans are growing at Chinese banks. Official statistics say the ratio of such loans to overall lending is less than 2%, but many believe the figure is much higher if loans to so-called zombie companies are included.
According to the China Banking Regulatory Commission, Chinese banks together held 1.39 trillion yuan ($211 billion) of nonperforming loans at the end of March, up 42% on the year. Such loans accounted for 1.75% of overall lending, the highest level in about seven years. If loans that are next in line to sour, called "special-mention" loans, are included, the ratio would rise to 5.76%.
