Китайские банки
Кайл Басс о проблемах в банковской системе Китая. Сейчас он шортит юань. Наблюдая за тем, что происходит в российской банковской системе, которая значительно меньше, чем китайская (100% ВВП против 340% ВВП), и в которой проблем скорее всего не меньше, чем у нас, а скорее даже больше, Басс, вероятно, еще недостаточно пессимистичен.
China has allowed (and encouraged) its banking system to grow into a gargantuan $34 trillion behemoth (a whopping 340% of Chinese GDP). For context, consider what the United States banking system looked like going into the GFC of 2007-2009. On-balance sheet, the US banking system had about $1 trillion of equity and $16.5 trillion of banking system assets (100% of US GDP). If non-banks and off-balance sheet assets are included, it would add another $12.5 trillion to get to about 175% of GDP. US banks lost approximately $650 billion of their equity throughout the GFC. We believe that Chinese banks will lose approximately $3.5 trillion of equity if China’s banking system loses 10% of assets. Historically, China has lost far in excess of 10% of assets during a non-performing loan cycle (The Bank for International Settlements estimated that Chinese banking system losses throughout the 1998-2001 cycle exceeded 30% of GDP).2 We expect losses in this cycle to exceed prior cycles. Remember, 30% of Chinese GDP approaches $3.6 trillion today. Think about how much quantitative easing (QE) the US Fed had to create in order to entice $650 billion of common and preferred equity into the US banks and prevent a Japanese-style deflationary bust. The Fed had to expand its balance sheet by roughly $4.5 trillion.
How significantly will the Chinese central bank have to expand its balance sheet in order to compensate for $3.5 trillion of lost bank capital? What will that do to the renminbi? What will happen to Chinese credit growth and broader Asian credit growth while this happens? If the US Fed’s experience serves as a proxy for what could happen in China, we believe that China will likely have to print in excess of 10 trillion US dollars’ worth of yuan to recapitalize its banking system. The weakening renminbi is just a symptom of the larger banking problems. By the time the loss cycle has peaked, we believe the renminbi will have depreciated in excess of 30% versus the US dollar. For those interested, we have a detailed view on the magnitude of the needed devaluation, which we would be pleased to discuss directly.
We must recognize that China is an emerging market. Emerging market banking systems should never be levered more or be larger than developed market banking systems for a variety of obvious reasons. China’s system is even more precarious when we realize that, even at the biggest banks, loans are not made to borrowers based upon their ability to repay. Instead, loan decisions are political decisions made by the state. Historically, booms and busts are typically driven by rapid credit expansion and then contraction. Credit has never grown faster or larger than it has in China over the past decade. China’s banking system has grown from under $3 trillion to over $34.5 trillion in assets over the last 10 years alone. No credit system in history has ever attempted this rate of growth. There is no precedent.
