Chinese bankers, overconfident?
By George Chen
The opinions expressed are the author’s own.
Are Chinese bankers overconfident? Or perhaps global investors are too suspicious of China?
A couple of days ago, Bank of China Chairman Xiao Gang dismissed growing market concern, in particular from the West, that a debt crisis could be brewing given the rising level of bad assets in China’s banking system.
Xiao said bad loans would be kept under control and he cited Chinese people’s “good tradition” of repaying debts to back up his argument.
Yesterday, Minsheng Banking Corp Chairman Dong Wenbiao told the media he believed the stock market, especially listed banks, under pressure since late last year from monetary policy tightening, should see some good days soon.
The simple investment logic behind his optimism? “Because the government is tightening the property market, but there’s still too much money in the market. When people are unable to buy property, they will choose to buy stocks again,” he told the official Guangzhou Daily.
Both Xiao and Dong gave their comments during the ongoing annual parliamentary meeting in Beijing. Bank of China is one of the Big Four state lenders. Minsheng Bank, the country’s No.7 bank by assets, is China’s first non-state lender with strong business links to local private businesses.
It may be unfair to say they are overconfident because this political summit in Beijing is exactly the time they must give expressions of firm confidence in China’s economic outlook.
Otherwise, why bother flying into Beijing for the meetings? Isn’t this all about boosting confidence? Not only for the public but also China’s leaders themselves?
George Chen is a Reuters editor and columnist based in Hong Kong.