Tax Exemption Prolonged for Real Estate DevelopmentThe chief of China's central bank, Dai Xianglong, said Wednesday that the governmet would recapitalize three of its four biggest commercial banks this year to help them meet minimum international standards, according to Beijing Today.Only one of the four - Industrial & Commercial Bank of China, Bank of China, China Construction Bank and Agricultural Bank of China - now meets the Bank for International Settlements¨standard of holding capital equal to 8 percent of assets, Mr. Dai said. He did not specify which bank was in compliance, though Ban of China' s annual report for 2000 indicated its ratio at 8.31 percent. "We will strive to recapitalize these to bring them up to 8 percent this year,￣ said Mr. Dai, governor of the People's Bank of China. "I think is achievable." China is strengthening its banks before joining the World Trade Organization. Their balance sheets are laden with billions of dollars of bad loans, the legacy of state-directed lending to unprofitable companies. "There are capital adequacy ratios, and then there are capital adequacy ratios," said Deborah Schuler, an analyst at Moody's Investors Service InBad loans may be between 35 percent and 60 percent of total lending, Ms. Schuler said. The Bank of China was in best shape, followed by the Industrial & Commercial Bank of China and China Construction Bank, she said. China shifted 1.4 trillion yuan ($169.1 billion), or 16 percent of the big four banks' bad loans, nto asset-management companies in 1999, the central bank said. He also said China's economy remained on target to expand by 7.2 percent this year. |
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