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China: The ProblemsBANKS: The government channeled 75% of bank credit into state enterprises. But this practice has produced at least $240 billion in bad debt and created a bank insolvency crisis. EXPORT SLOWDOWN: Coastal provinces absorbed billions in foreign investment to build factories for overseas markets. But Asia, which accounts for half of exports, has collapsed, and foreign investment has slowed. SPECULATION: Billions have poured into office buildings and shopping malls in Beijing, Shanghai, and Guangzhou. Overcapacity and new debt problems for the banks are the result. JOBS: As state-owned enterprises pile up losses, more are shutting factories, producing new jobless masses--maybe twice as high as the official statistics.
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Updated Mar. 5, 1998 by bwwebmaster
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