14 October 2011

10 Percent of the Chinese Economy?

It turns out that much of the lending to small businesses in China is done by loan sharks, because the official banks prefer to lend to large state owned enterprises.

That's not shocking. Official Chinese societal structures have always been for the benefit of the few over the many.

That being said, a throw away line in a New York Times article is truly shocking:
Such illegal lending amounts to about $630 billion a year, or the equivalent of about 10 percent of China's gross domestic product, according to estimates by the investment bank UBS.
10%?  10% of the f%$#ing Chinese economy is loan sharking???????

When the bubble bursts in China, and there is a bubble in China, it's going to be incredibly ugly.


Cthulhu said...

Maybe I could make a mint exporting Guillotines to China, when the day comes.

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