China's fourth and last asset management company (AMC) was unveiled in Beijing on October 19, marking the formal kick-off of the government's strategy to deal with the massive bad assets of its banking sector.

　 Like the three other AMCs before it, the China Huarong Asset Management Company officially launched today has a registered capital of 10 billion yuan from the Ministry of Finance and enjoys tax immunity and other preferential policies.

　 The four AMCs, established in half year, are government arms to handle the bad assets of China's four major state-owned commercial banks, namely, the Industrial and Commercial Bank of China, the Agriculture Bank of China, the Construction Bank of China, and the Bank of China.

　 The latest official figures show that by the end of September, lending by Chinese banks totaled 9,000 billion yuan, and Dai Xianglong, governor of the People's Bank of China, the central bank, said non-performing loans account for about 10 percent of the total.

　 The AMCs are authorized to revitalize the bad assets through restructuring, debt-to-equity swaps and liquidation, among other means. They could also sell the creditor's rights and stock rights of the target enterprises to overseas investors.

　 As the four said banks serve as the backbone of China's banking sector, experts say that offsetting their bad assets would lay a solid foundation for the stability of the entire banking sector.

　 Tang Xu, a senior official of the central bank, said the total assets of China's state-owned commercial banks have been increasing quickly in the past two decades with the country's rapid economic growth, but their reserve fund has been dropping relatively.

　 The strip-off of the bad assets from them would strengthen their paying capacity remarkably, he added.

　 Kathie Krumm, chief of the Economics Unit of the World Bank's representative office in Beijing, said China would be able to control the potential risks of its banking sector if the government's strategy to settle non-performing bank loans could be effectively implemented.

　 Yan Haiwang, a central bank deputy governor, expressed his confidence at the AMCs, saying that they would play a major role in controlling the financial risks and promoting the reform of China's state-owned enterprises. (Xinhua)