Defusing time bombs

• Published 17 Jun 2010

The banking regulator shows a willingness to defuse one of China's biggest financial time bombs but appears likely to keep tiptoeing around another.

As usual, there are sharply divergent readings on China's financial future. Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), acknowledged this week in the CBRC's 2009 annual report that the banks are "grappling with the pressure of increasing bad loans". But he saw the regulator's task ahead in more poetic terms: "We remain cool-headed about the weaknesses to be addressed and fixed; as an ancient Chinese poem says, there will be a day when we brave the strong wind and surge the mountain-high waves, hoist a sky-reaching sail to voyage on the vast blue sea".

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