隨著中國疼痛蔓延，全球最大銀行股價跌至歷史低點

On 5^th August, 2019 Yahoo Finance reported the following:

Finance

World's Biggest Banks Sink to Record Lows as China Pain Spreads

Bloomberg  Bloomberg News,Bloomberg 13 hours ago

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China's big four banks (Source: Yahoo)

(Bloomberg) -- Stock investors have never been so downbeat on the world’s biggest banks. China’s “big four” state-owned lenders, which together control more than $14 trillion of assets, tumbled to record-low valuations on Monday amid mounting concern that Beijing will encourage them to bail out smaller peers. Industrial & Commercial Bank of China Ltd., the world’s largest lender by assets, lost $11 billion of market value last week after injecting capital into a troubled regional bank as part of a government-orchestrated rescue.

Big Chinese lenders have long sacrificed profits in the name of national service, but that prospect has become increasingly worrying as pressure builds on their regional, city and rural peers. Smaller Chinese banks tracked by UBS Group AG need an estimated $349 billion of fresh capital -- a sum they may struggle to raise without support from the likes of ICBC. For shareholders already skittish about the trade war, rising corporate defaults and slowing economic growth, it’s yet another reason to sell.

“State-owned commercial banks are clearly suffering from the market impression that they will need to swallow other smaller and weaker banks, at least partially,’’ said Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis SA in Hong Kong.

ICBC declined to comment. The China Banking and Insurance Regulatory Commission and press officers at the country’s other mega-banks -- China Construction Bank Corp., Bank of China Ltd., and Agricultural Bank of China Ltd. –- didn’t respond to requests for comment.

While the four firms have dominated China’s $40 trillion banking system for decades, they’ve been joined in recent years by a growing number of smaller banks, many of which funded themselves with opaque asset management products and interbank borrowing, instead of more stable consumer deposits. These smaller banks are now getting squeezed as regulators clamp down on risky funding methods and China’s economic slowdown causes bad loans to increase.

Their plight has been a major focus of investors since May, when Beijing surprised markets by seizing control of Baoshang Bank Co. in the first government takeover of a Chinese lender in two decades. That was followed two months later by a capital injection into Bank of Jinzhou Co. by ICBC and two other state-owned financial firms.

Analysts predict that more of China’s roughly 4,000 small lenders will run into trouble and that bigger banks will be asked to play a role in shoring them up. While regulators could in theory allow distressed lenders to fail, that outcome is seen as unlikely because of Beijing’s focus on maintaining financial stability. When authorities imposed losses on a small number of Baoshang Bank’s creditors, it triggered a mini-panic in inter-bank funding markets that only subsided after big cash injections from the central bank.

“The smaller banks, as they require the fire hose, will likely get rolled up into the bigger banks, where they can disappear,” said Christopher Balding, an associate professor at Fulbright University Vietnam who has written extensively on the Chinese economy and financial system.

Investors have responded by pummeling Hong Kong-listed shares of the big four, sending prices to record lows relative to book value, or net assets. The stocks traded on Monday at an average price-to-book ratio of 0.61, falling below a previous nadir reached in February 2016.

For investors with longer time horizons, it might be a good time to buy, said Terry Sun, a Hong Kong-based analyst at CMB International Securities Ltd. Chinese authorities are unlikely to force big banks to take on more than they can handle, according to Jim Stent, author of “China’s Banking Transformation.’’

“Even if you take some pretty severe assumptions on how many banks need to be taken over, you will likely find it’s scarcely a ripple on the profits and balance sheets of the big banks,’’ Stent said. The big four reported combined profits of $140 billion last year, according to data compiled by Bloomberg.

Katherine Lei, a Hong Kong-based analyst at JPMorgan Chase & Co., is less sanguine. In a report dated July 29, Lei said she was taking a more cautious view on Chinese bank shares, citing the overhang of troubled smaller lenders as well as rising corporate default risks and increased government pressure to give borrowers favorable interest rates to support economic growth.

“The cases of Baoshang and Jinzhou will unlikely be an end,’’ Lei wrote. “Large banks could be brought in to deal with potential small bank problems going forward.’’

Translation

（彭博社）  股票投資者對世界上最大的銀行從未如此悲觀。中國“四大”國有銀行共同控制著超過14萬億美元的資產，週一價值跌至創紀錄低位，因市場擔心北京將鼓勵他們紓困較小的同行。中國工商銀行股份有限公司是世界上資產規模最大的銀行，上週作為政府精心策劃的救援計劃的一部分，在向陷入困境的地區銀行注資，損失了110億美元的市值。

中國大型銀行長期以國家服務的名義犧牲了利潤，但隨著地區，城市和農村同行的壓力增大，這種前景變得越來越令人擔憂。瑞銀集團（UBS Group AG）追踪的規模較小的中資銀行估計需要3490億美元的新資金 - 如果沒有中國工商銀行的支持，他們可能難以籌集資金。對於已經對貿易戰，公司違約率上升, 和經濟增長放緩感到不安的股東來說，這是要出售它的另一個原因。

香港Natixis SA亞太區首席經濟學家Alicia Garcia Herrero表示，“國有商業銀行顯然正面臨做成一些市場印象，即他們需要吞下其他規模較小且較弱的銀行，至少部分是這樣。”

工行拒絕置評。中國銀行業和保險監督管理委員會, 以及該國其他大型銀行 -- 中國建設銀行股份有限公司，中國銀行股份有限公司和中國農業銀行股份有限公司的新聞官員均對置評請求不作回應。

雖然這四家公司幾十年來一直主導著中國40萬億美元的銀行系統，但近年來規模較小的銀行越來越多加入了，他們其中許多是通過不透明的資產管理產品和同業拆借來獲得資金，而不是依靠更穩定的消費者存款。 。由於監管機構限制有風險融的資方式，中國經濟放緩導致不良貸款增加，這些規模較小的銀行現在受到擠壓。

自5月份以來，他們的困境一直是投資者關注的主要焦點，當時北京令市場感到意外 -- 二十年來首次由政府收購包商銀行, 並且接管控制權。兩個月後，中國工商銀行和另外兩家國有金融公司向錦州銀行注資。

分析師預測，中國大約4000家小型銀行將面臨更多麻煩，並且將要求更大的銀行去發揮作用支持它們。雖然監管機構理論上可以讓陷入困境的貸款人違約，但由於北京方面的重點是維持金融穩定，因此這種結果被視為不太可能。如當局對少數寶商銀行的債權人造成損失，是會引發了銀行間融資市場的小恐慌，只有在中央銀行大量現金注入後恐慌才會消退。

 富布賴特大學越南的Christopher Balding副教授說“較小的銀行，因為他們需要滅火，可能會被捲進入更大的銀行，在那裡他們可以消失”，他曾撰寫了大量有關中國經濟和金融體系的文章。

投資者通過對四大香港上市股票作出回應，將其價格相對於賬面價值或淨資產降至歷史低點。這些股票週一交易的平均價格與賬面比率為0.61，低於2016年2月達到的最低點。

CMB國際證券有限公司（CMB International Securities Ltd.）駐香港的分析師特里•孫（Terry Sun）表示，對於投資時間較長的投資者來說，如今可能是一個購買的好時機。 “中國銀行業轉型” 一書的作者吉姆斯坦特認為中國當局不太可能強迫大銀行承擔超出他們能夠承受的責任。

“即使你對需要接管多少銀行採取了一些非常極端的假設，你也可能會發現它幾乎不會對大銀行的利潤和資產負債表產生影響，”斯坦特說。根據彭博彙編的數據，四大巨頭去年的總利潤為1400億美元。

摩根大通（JPMorgan Chase＆Co。）駐香港分析師凱瑟琳•雷（Katherine Lei）不太樂觀。在7月29日的一份報告中，雷表示，她對中國銀行股的態度更為謹慎，理由是陷入困境的小型銀行存在問題，企業違約風險上升, 以及政府施加壓力要求借款人提供優惠利率以支持經濟增長。

“包商和錦州之類的案件不太可能就始結束，”雷寫道。 “大型銀行可能被繼續引進入來應對潛在的小銀行問題。”

Comments

     So, the four big Chinese banks will be too important to fall. In a way we can say that all banks in China are save to deposit with money as they are guaranteed by the Government. Another point I note is that while the big Chinese banks have long sacrificed their profits in the name of national service, could this also happen in Hauwei in that the company may be asked to do something which could risk it business interests (e.g. hurting the company’s reputation or trustworthiness) for the Chinese government in the name of national interest. It seems that the US government has such a worry.

 In 2017 China has passed the National Intelligence Law which states that "any organization and citizen should support, assist and cooperate with national intelligence work in accordance with the law."

中國在東南亞基礎設施競賽中不敵日本

Recently Yahoo News on-line reported the following:

Yahoo Finance

China No Match for Japan in Southeast Asia Infrastructure Race

Bloomberg  Michelle Jamrisko,Bloomberg Sat, Jun 22 5:00 PM PDT

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 (Bloomberg) -- Japan is still winning the Southeast Asia infrastructure race against China, with pending projects worth almost one and a half times its rival, according to the latest data from Fitch Solutions.

Japanese-backed projects in the region’s six biggest economies -- Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam -- are valued at $367 billion, the figures show. China’s tally is $255 billion.

The figures underline both the rampant need for infrastructure development in Southeast Asia, as well as Japan’s dominance over China, despite President Xi Jinping’s push to spend on railways and ports via his signature Belt and Road Initiative. The Asian Development Bank has estimated that Southeast Asia’s economies will need $210 billion a year in infrastructure investment from 2016 to 2030, just to keep up the momentum in economic growth.

The latest Fitch figures, provided in an emailed response to Bloomberg, count only pending projects -- those at the stages of planning, feasibility study, tender and currently under construction. Fitch data in February 2018 put Japan’s investment at $230 billion and China’s at $155 billion.

Vietnam is by far the biggest focus for Japan’s infrastructure involvement, with pending projects worth $209 billion -- more than half of Japan’s total. That includes a $58.7 billion high-speed railway between Hanoi and Ho Chi Minh City in Vietnam.

For China, Indonesia is the primary customer, making up $93 billion, or 36%, of its overall. The prized project there is the Kayan River hydro-power plant, valued at $17.8 billion.

Across all of Southeast Asia and by number of projects, Japan also carries the day, though by a smaller margin: 240 infrastructure ventures have Japanese backing, versus 210 for China in all 10 Southeast Asian economies.

Translation

雅虎財經

（彭博社） - 根據惠譽的最新數據，日本仍然贏得了它針對中國的東南亞基礎設施的競賽，在等待审核項目中与其競爭對手的價值幾乎高出1.5倍。

數據顯示，該地區六大經濟體 - 印度尼西亞，馬來西亞，菲律賓，新加坡，泰國和越南 - 的受日本支持項目價值為3670億美元。中國的總數是2550億美元。

這些數字突顯了東南亞基礎設施發展的强烈需求，以及日本相對中國是在主導着的地位，儘管習近平主席通過其簽署的“一帶一路”計劃推動鐵路和港口的投資。亞洲開發銀行估計，從2016年到2030年，東南亞經濟每年需要2100億美元的基礎設施投資，以保持經濟增長勢頭。

通過惠譽電子郵件回覆彭博社所提供, 最新數據 統僅計岀各待定項目 --  即處於規劃，可行性研究，招標, 和目前正在建設階段的項目。 2018年2月的惠譽數據顯示，日本的投資額為2300億美元，中國的投資額為1550億美元。

越南是迄今為止日本基礎設施參與的最大焦點，未決項目價值2090億美元 - 超過日本總數的一半。其中包括越南河內和胡志明市之間的587億美元高速鐵路。

對於中國而言，印度尼西亞是主要客戶，佔其總體的930億美元，即36％。這個珍貴的項目是卡揚河水電站，價值178億美元。

在整個東南亞地區和項目數量上，日本也獲勝，但差距較少：在所有10個東南亞經濟體中240家基礎設施企業獲得日本支持，210家獲中國支持。

Comments

      So, China and Japan are competing in South-east Asia on construction projects to generate influence. The competition has many positive impacts, at least it will help the economic development of South-east Asia as a whole.

Model guns made in Japan (5)

Mauser M712 model gun made by Marushin

A user-guide on Mauser M712 Model gun by Marushin

In the 1980s Marushin manufactured a model gun of Mauser M712 using cheap alloy and plastic. It has a switch for the user to choose between semi-automatic and fully automatic firing mode. Basically Mauser pistol is the semi-automatic, that  means it is a self loading pistol, e.g. the Mauser Modell 1916 which was manufactured in early 20th century.  Later Mauser company produced an improved version in that a switch is added to choose a full-automatic firing mode, such as the Mauser M712.

A finished M712 model gun

A loading bridge and a 10-round magazine

Major Frederick in his book entitled “Modern Small Arms” of 1978 introduces the history of Mauser pistols and says that “Peter Paul Mauser is probably best known for his work with rifles . . . He first became really interested in pistols in the 1870s and in 1878 he produced an ingenious revolve . . .  He then turned to self-loading pistols and after various experiment produced his Model 1896, followed by possibly the best known of all, the Model 98 . . . It was a pistol of this type that Winston Churchill carried in the Omdurman campaign when a shoulder injury prevented him from using a sword. . . [The Mauser Modell 1912] was made in large numbers right up to 1918 and is probably the commonest type to be found today.” This Frederick also says that “it is often believed that a full-automatic version was used in the period 1914-18 but his is not so . . . it was not a great success because it overheated’.

A drawing of the Mauser M712 model gun parts

This model gun Mauser M712 made by Marushin comes with several accessories, e.g. the ammunition loading bridge used to load ten rounds of ammunition from the top into the standard magazine of the gun. Also, there is an optional 20-round magazine. There is also a wooden holster. Besides being used as a holster, it can be fitted to the grip thus turning the pistol into a rifle to facilitate the user to take aim more accurately at long distance shooting objects. In fact, the aiming device gives a reading of up to 1000 (feet?)

The sight with a 1000 marking

Mauser Model 1916 (A model gun by MGC)

A switch to choose N (Normal) or R (Repetition)

This model gun is relatively difficult to assemble as there are a lot of small moving parts. When I assembly this model gun, I have the feeling of assembling a watch. The model by Marushin is perfectly done as this manufacturer can balance the authentic appearance of the gun while at the same time making sure that the firing mechanisms of the pistol can work smoothly. For me this pistol has a rich historical meaning. In Europe it was widely used by the Germany soldier during the WWI.  In China it was used by the authorities during and after the 1911 Revolution, and also by the anti-Japanese Chinese forces during the Sino-Japanese War of 1937-1945.

A Mauser pistol in a wooden holster with a leather pocket attached

UK study - Risk of developing dementia could be reduced by healthy lifestyle

Recently CNN.co.jp reported the following:

認知症の発症リスク、健康的な生活習慣で低減か　英研究

2019.07.15 Mon posted at 17:46 JST

  「健康的なライフスタイル」で認知症リスクが低減する可能性があることがわかった/Bethany Clarke/Getty Images Europe/Getty Images

（ＣＮＮ） たとえ認知症を発症する確率が遺伝的に高い人でも、健康的な生活習慣を心がければリスクを低減する助けになるかもしれないという研究結果が、１４日の医学誌ＪＡＭＡに発表された。

この研究結果は、このほど開かれたアルツハイマー学会の国際会議でも発表されている。

今回の研究では、認知症の遺伝的リスクが高いとされた人のうち、食生活に気を配り、運動を習慣づけ、飲酒は最小限に抑え、喫煙しない人は、後に認知症を発症する確率が低いことが分かった。

研究チームは英国に住む６０歳以上の高齢者１９万６３８３を対象として２００６～１０年にかけて調査を行い、１６～１７年に追跡調査を実施した。

その結果、健康的な生活を送っている人が後に認知症を発症する確率は１．１３％だったのに対し、健康的ではない生活を送っていた人の発症率は１．７８％だった。これは統計的には重要な違いとされる。

今回の発表を行った英エクセター大学医学校の研究者は、「認知症の遺伝的リスクに対して対抗を試みるため出来ることがあると分かったという点でエキサイティング」と評価、「遺伝的リスクを問わず、健康的なライフスタイルを続けることは、認知症のリスク低下と関係がある」と解説する。

ただし今回の調査で対象となったのは全員が欧州にルーツを持つ高齢者で、ライフスタイルは自己申告だった。

英認知症調査研究所の専門家は、「多くの人にとって、健康的な生活は認知症予防の助けになり得ることが、改めてデータによって示された。ただし健康的な生活を心がけても認知症を発症する人はいる」と指摘している。

Translation

 Even people with a high genetic chance of developing dementia might be able to reduce their risk if they had a healthy lifestyle, a study was published in the medical journal JAMA on 14th.

The results of this study had been presented at a recent international conference of the Alzheimer's Society.

The study found that among those who were considered to have a high genetic risk of dementia, those who took care of their diet, exercise habitually, with a minimum alcohol drank, and did not smoke were less likely to develop dementia later.

The research team conducted a survey on 196,383 elderly people over the age of 60 living in the UK from the year 2006 - 2010, and in 2016-17 conducted a follow-up survey study.

As a result, the rate of people who led healthy lives to develop dementia later was 1.13%. Compared to 1.18% for those people who lived a non-healthy life. This was a statistically important difference.

Researchers at the University of Exeter Medical School in the UK which presented the presentation commented that it was "exciting to find that there are things we can do to counter the genetic risk of dementia" and explained that “maintaining a healthy lifestyle, regardless of genetic risk, is linked to a decreased risk of dementia”.

However, the survey included all elderly people with European roots and their lifestyles were self-reported.

Experts at the British Institute for Dementia Research said: "For many people, the data has again shown that healthy living can help prevent dementia. However, there are people who develop dementia even if they try to live a healthy life."

     So, good life style could reduce the risk of dementia for many people. Indeed good life style has many benefits.

柬埔寨否認有協定允許中國軍隊在其海軍基地駐軍

Recently the Reuters World News on-line reported the following:

WORLD NEWS JULY 22, 2019 / 8:47 AM / 4 DAYS AGO

Cambodia denies deal to allow armed Chinese forces at its naval base

WASHINGTON (Reuters) - China will be able to place armed forces at a Cambodian naval base under a secret pact between the two nations, the Wall Street Journal said on Sunday, although Cambodian officials denied such a deal had been struck.

The agreement, reached this spring but not made public, gives China exclusive access to part of Cambodia’s Ream Naval Base on the Gulf of Thailand, the Journal said, citing U.S. and allied officials familiar with the matter.

Such an arrangement would boost China’s ability to assert contested territorial claims and economic interests in the South China Sea, challenging U.S. allies in Southeast Asia.

Chinese and Cambodian officials denied such a pact existed, the Journal said.

“This is the worst-ever made up news against Cambodia,” Cambodian Prime Minister Hun Sen told the pro-government news site Fresh News on Monday.

“No such thing could happen because hosting foreign military bases is against the Cambodian constitution.”

Cambodian defense ministry spokesman Chhum Socheat told Reuters the report was “made up and baseless”.

In Beijing, foreign ministry spokesman Geng Shuang said, “As I understand it, the Cambodia side denied this.”

But he declined to respond to repeated questions whether China also denied the report.

“China and Cambodia are traditionally friendly neighbors,” Geng told a news briefing.

“We have cooperated in various areas. Our cooperation is open, transparent, and mutually beneficial and equal. I hope the relevant parties do not overinterpret it.”

Hun Sen’s strongest regional ally, China has poured billions of dollars in development assistance and loans into Cambodia through two-way frameworks and its Belt and Road initiative.

The initiative, unveiled by Chinese President Xi Jinping in 2013, aims to bolster a sprawling network of land and sea links throughout Asia, the Middle East, Europe and Africa.

It has attracted a flood of Chinese commercial ventures in Cambodia, including casinos and special economic zones.

This month the U.S. Defense Department suggested China may be attempting to gain a military foothold in Cambodia, in a letter to Cambodia asking why the nation had turned down an offer to repair a naval base.

In a statement, the State Department urged Cambodia to reject such an arrangement, saying the nation had a “constitutional commitment to its people to pursue an independent foreign policy”.

It added, “We are concerned that any steps by the Cambodian government to invite a foreign military presence in Cambodia would threaten the coherence and centrality of the Association of Southeast Asian Nations in coordinating regional developments, and disturb peace and stability in Southeast Asia.”

Cambodia denied reports last November that China had been lobbying it since 2017 for a naval base that could host frigates, destroyers and other vessels of the People’s Liberation Army Navy.

(Reporting by Pete Schroeder and David Brunnstrom in WASHINGTON; Additional reporting by Prak Chan Thul in PHNOM PENH, and Catherine Cadell in BEIJING; Editing by James Pearson and Clarence Fernandez)

Translation

華盛頓(路透社)-根據兩國之間的秘密協定,中國將能夠在柬埔寨海軍基地安置軍隊,儘管柬埔寨官員否認已經達成這樣的協定。

《華爾街日報》援引熟悉此事的美國和盟國官員的話說,今年春季達成的這項協定沒有被公開, 它允許中國獨家進入位於泰國灣的柬埔寨雷姆海軍基地。

這樣的安排將提高中國能力在南中國海主張有爭議的領土要求和經濟利益,挑戰美國在東南亞的盟友。

《華爾街日報》說,中國和柬埔寨官員否認存在着這樣的協定。

柬埔寨首相洪森週一在接受親政府新聞網站《新消息》採訪時說:"這是有史以來對柬埔寨的最恶劣的製造新聞。

"不可能發生這樣的事情, 因為託管外國軍事基地是違反柬埔寨的憲法。

柬埔寨國防部發言人ChhumSocheat告訴路透社,這份報告是"毫無根據的"。

在北京,外交部發言人耿爽說,"據我所知,柬埔寨方面否認了這一點。

但他拒絕回答中國是否也否認這一報導的反復提問。

"中國和柬埔寨是傳統的友好鄰邦,"耿在新聞發佈會上說。

"我們在多個領域進行了合作。我們的合作是公開、透明的、互利的、平等的。我希望有關方面不要對此過度解釋。

中國是洪森最強有力的地區盟友,中國通過雙向框架和"一帶一路"倡議向柬埔寨投入了數十億美元的發展援助和貸款。

中國國家主席習近平于2013年公佈了這一舉措,旨在鞏固亞洲、中東、歐洲和非洲龐大的陸地和海上聯繫網路。

這舉措吸引了大量中國商業企業在柬埔寨投資,包括賭場和經濟特區。

本月,美國國防部在給柬埔寨的一封信中暗示中國可能試圖在柬埔寨獲得軍事立足點,信中詢問為什麼拒絕了修復海軍基地的提議。

美國國務院在一份聲明中敦促柬埔寨拒絕這種安排,稱柬埔寨"對本國人民有憲法承諾,奉行獨立的外交政策"。

它補充說,"我們擔心任何柬埔寨政府步驟邀請外國軍力出现在柬埔寨將威脅東南亞國家聯盟在協調區域事態發展中的一致性和中心性,並擾亂東南亞的和平與穩定。

去年11月,柬埔寨否認了有關中國自2017年以來一直在遊說建立一個海軍基地的報導,該基地可以容納中國人民解放軍海軍的護衛艦、驅逐艦和其他船隻。

My comments

              I am interested in knowing whether Chinese navy will appear in Cambodia’s navy bases in the near future. I believe that the US has superb spying satellites and they can easily detect the naval activities of China in the region.

為什麼中國不能讓經濟動起來

A week ago Yahoo Finance reported the following:

Why China Can’t Get Its Economy Moving

Bloomberg  Dinny McMahon,Bloomberg 12 hours ago

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(Bloomberg Opinion) -- China’s new GDP numbers show that the world’s second-biggest economy is growing more slowly than at any time since the early 1990s. Chinese leaders know what they need to do to arrest the slide: pump more credit into private companies, which generate the majority of jobs and growth. The fact that growth isn’t picking up regardless of their efforts would suggest banks are resisting this imperative. But, the issue isn’t whether they’re complying, it’s how they’re choosing to do so.

The government is correct that the private sector’s health is essential to the viability of the overall economy. Private firms account for 80% of jobs, 60% of economic growth and about half of all fiscal revenue in China -- and manage to do so with far lower levels of debt than state-owned companies. Since May 2018, the central bank has thus repeatedly cut banks’ reserve requirement ratios to free up liquidity, then nudged banks to direct that credit toward private firms, especially small- and medium-sized enterprises.

At the same time, authorities have demanded that banks reduce risk which, in a slowing economy, should mean more conservative and market-oriented lending practices. Chinese banks consider small, private companies as the single riskiest group of borrowers in the economy. Unlike state-owned firms, they’re not backed by the government and often don’t have a lot of assets that they can post as security.

Banks have found a way to balance these competing demands by ramping up a very specific type of lending -- discounting of bankers’ acceptances.

While bankers’ acceptances exist the world over, they play an outsized role in China’s financial system. When a company buys something from a supplier, it can pay using a bankers’ acceptance, issued by a bank on behalf of the buyer. When the acceptance matures at some pre-arranged point in the future, the supplier exchanges it for cash from the bank for the amount of the sale. The bank then seeks payment from the company on whose behalf it issued the acceptance.  

Sometimes, however, the company that’s been paid with an acceptance needs money before it’s due. It can then go to any bank and exchange the acceptance for cash, albeit at a discount to the value of the acceptance. In short, discounting is not unlike a low-interest payday loan, with the bank lending against future income. The discount rate is currently about 3.6%, which means that if a company cashes in a 100-yuan acceptance that matures in six months, it will receive a discounted 98.2 yuan from the bank.

For the past year, growth in bank lending to non-financial companies has been driven solely by bankers’ acceptance discounting. At the end of April 2019, the outstanding volume of discounted bankers’ acceptances -- what the People’s Bank of China refers to as “paper financing” -- was up 2.92 trillion yuan ($425 billion), or 76%, from a year earlier, accounting for 32% of all new credit created in that period. Meanwhile, new medium- and long-term loans declined 6% over the same period to 5.53 trillion yuan. Short-term loans (which accounted for 4% of new loans) fell 67%.

For banks, discounting seems like a handy solution to their political dilemma. Most of the companies that present acceptances for discounting are small, privately owned firms -- just the kind of companies the government is looking to support. At the same time, discounting is the safest type of corporate loan a bank can make. While the cash goes to a company, the counter party risk lies with the bank that issued the acceptance.

In effect, discounted bankers’ acceptances are inter-bank loans. Consequently, the risk-weighted capital that banks need to set aside against them is far less than that required for ordinary corporate loans. That’s particularly useful at a time when the large volume of bad-loan write-offs is making unprecedented demands on bank capital. What acceptances don’t do, unfortunately, is expand economic activity. As a rule, companies don’t like discounting their acceptances. Many Chinese firms operate on wafer-thin margins, and discounting erodes their profits. Only when they desperately need cash -- to pay wages, bonuses, taxes and social security contributions, utilities and interest on loans -- do they resort to the tactic.

While acceptances are useful as a way of getting cash to companies that are otherwise struggling to stay alive, therefore, they don’t provide either the investment capital or working capital needed to stimulate growth. For that, banks would have to extend real (and far riskier) loans to companies, which they’re still loath to do.

The central bank has supported discounting as the answer to the private sector’s problems. Other branches of the government are less convinced. At the end of June, an official from the National Audit Office said the financing environment for small firms hasn’t “fundamentally improved.” Till now, Chinese policymakers and banks have been able to convince themselves that they can make the country’s financial system safer while also stimulating growth. They may soon have to choose between the two.

Translation

 (彭博觀點)--中國新的國內生產總值資料顯示, 這個世界第二大經濟體的增長速度比上世紀90年代初以來的任何時期都慢。中國領導人知道他們需要做些什麼來遏制這種下滑: 向私人公司注入更多的信貸, 從而創造了大部分就業機會和增長。事實證明, 無論它們的努力如何, 經濟增長並沒有加快, 這一事實表明, 銀行正在抵制這一迫切性。但是, 問題不在於他們是否遵守, 而是他們選擇如何去做。

政府是正確的,私營部門的健康對整體經濟的生存能力至關重要。私營企業占中國80%的就業機會、60%的經濟增長, 和大約一半的財政收入, 而且其債務水準遠低於國有企業。因此, 自2018年5月以來, 央行多次下調銀行存款準備金率以釋放流動性, 然後推動銀行將信貸投向私營企業, 尤其是中小企業。

與此同時,當局要求銀行降低風險,在經濟放緩的情況下,這應該意味著面對向市場的群體,貸款行為需要更加保守。中資銀行認為, 小型私人公司是經濟中風險最大的借款人群體。與國有企業不同, 它們不受政府支援, 而且往往沒有很多資產可以作為擔保。

銀行已經找到了一種平衡這些相互競爭需求的方法,即增加一種非常具體的貸款類型 —— 有折扣的銀行承兌

雖然銀行家承兌在世界各地都存在,但他們在中國金融體系中扮演了一個超乎尋常的角色。當公司從供應商處購買某物時,它可以使用銀行來代表買方簽發銀行承兌匯票付款。當承兌金額在將來某個預先安排的某個時間點到期時, 供應商會將其從銀行兌換成現金以換取銷售金額。銀行隨後向代其出具承兌匯票的公司尋求付款。

 然而,有時,接受承兌匯票付款的公司在未到期需要錢,它可以去任何銀行,將承兌匯票兌換成現金,儘管與承兌價值有折扣。簡而言之, 貼現與低息發薪日貸款並無二, 銀行貸款用未來收入作担保。貼現率目前約為3.6%, 這意味著如果一家公司在6個月內兌現100元的承兌, 在减扣貼現後將從銀行獲得98.2元。

過去一年,銀行對非金融公司的貸款增長完全是由銀行家的承兌貼現推動的。截至2019年4月底, 中國銀行(人民銀行稱之為"票據融資") 的貼現銀行承兌額較上年同期增加2.92萬億元(合4250億美元), 或較上年增長76%, 占新增信貸總量的32%。與此同時, 同期新增中長期貸款5.53萬億元, 同比下降6%。短期貸款(占新增貸款的4%) 下降了67%。

對銀行來說, 貼現似乎是解決其政治困境的一個得心應手的辦法。大多數接受折扣的公司都是小型的私有公司, 而正是政府希望支援的那種公司。同時, 貼現是銀行所能發放的最安全的企業貸款類型。當現金流向公司時, 交易對手的風險在於簽發承兌匯票的銀行。

實際上, 貼現的銀行家的承兌是銀行間貸款。因此, 銀行需要預留的風險加權資本遠遠低於普通企業貸款所需。在大量不良貸款核銷對銀行資本提出前所未有的資本需求的時候, 這做法尤其有用。不幸的是, 接受承兌並沒有使經濟活動擴大。通常, 公司不喜歡接受打折承兌。許多中國公司的利潤微薄, 而貼現侵蝕了他們的利潤。只有當他們迫切需要現金 ——如支付工資、獎金、稅收和社會保障繳款、水電費和貸款利息——他們才會採取這種策略。

雖然接受承兌是有用的, 它是一種方式去使掙扎活著的公司獲得現金, 因此承兌銀行是沒有提供投資資本或營運資本以刺激增長。為此, 銀行應該向企業提供實際(風險大得多)的貸款, 然而他們仍不願意這樣做。

央行一直支援貼現,作為解決私營企業問題的辦法。政府的其他部門則不太信服。6月底,國家審計署的一位官員表示,小企業的融資環境沒有"根本改善"。到目前為止,中國的政策制定者和銀行已經能夠說服自己可以使中國的金融體系更安全, 同時亦能刺激增長。他們可能很快就會在兩者之間做出選擇。

              So, China should have a way to solve their economic problems soon.