Originally Posted by jeypore
Thanks for the link, but that does not support the statement of "world's highest default rates". And I'd stop criticizing govt. control of banks - US owns 79% of AIG, 60% of Citi, is owed large loans by all other banks and essentially funds day to day operations of major US banks (through the discount window).
India stipulates mandatory agricultural loans, 16% rural branches and no-fully-owned-foreign-banks. It does slow the growth of the sector and economy, but also gives more room for government to intervene in a crisis.
Anyway, expecting Chinese govt. to keep its hands off the banking sector, the lubricant of the economy which it wants to control is pointless. If they mess up, they can always control the currency exchange rates and rescue the banks -its simpler than picking up broken pieces left by a private banking sector.
Of course, if Chinese government can single handedly handle a serious multi-sector crisis is open to question, but that is not the current crisis as far as China is concerned.