EiEconomiede la Chine19 mai Conclusion sur lesles menaces pesant le miracle chinoisSandra PoncetEiEmaill: sanddira.poncet@univ‐pari1is1.fr1Introduction33 aspectsFinancial risksSocial threatsEnvironmental threats2I‐Is a financial crisis plausible in China? A‐Bankingsectorfragility11‐Non performing loansGreat uncertainty on the level of current NPL‐Uncertainty on the level prior to the most recent round of recapitalization‐Uncertainty on the exact value of NPL removed‐ on what happens to the NPL now in the AMCs‐Uncertainty on the quality of current loans (the most crucial issue): 1000 b$3I‐Is a financial crisis plausible in China? A‐Bankingsectorfragility11‐Non performing loansa‐Reasons to worry about the quality of current loans (flow problem)‐‐rapidrapid increase in loansloansIncentives to overlend because local branches of SOCBs are pressured by local governments LendingLending maymay be backed with collateral (over‐vavalued real estate) ‐no incentives to impprove the managgement of the new loansBanks may have the impression that high profitsmay enable them to write‐down their bad debts so that NPLs are not that painful: artificially high profits due to artificially large spread betwbetween ‐‐capped deposit ratesrates (2.3%)‐floored lending rates (5%)CoCrony capitalisism isis the rueule ...