Where are all of the funds from Chinese bank lending going?
September 11th, 2009
This article is a few weeks old but I think it illustrates where a good bit of the Chinese lending is ending up. It appears that many of the loans are being made to Chinese state owned corporations and instead of creating additional capacity managers are plugging funds into the housing market and the stock market. The government was making noises several weeks ago about curtailing loans and that coincided with a 20% drop in the Chinese stock market. The latest noises and statistics coming out of the Chinese government suggest that lending is not going to be curtailed any time soon.
http://www.chinastakes.com/2009/8/as-bank-credit-ebbs-is-the-stock-market-bull-doomed.html