China's Banks....

Minsheng Bank, the latest bank in China to get rocked by scandal, finds more problems.

Minsheng said in a statement that a former vice governor at a Guangzhou branch had issued false bills allowing a local real estate firm to take out an unauthorized 300 million yuan loan.

If you are a foreigner and want to invest in China, good luck. Stay home you will be better off.

Still, China's first privately-owned bank has been hit by two similar fake-loan scandals in recent months, at branches in Shanghai and Beijing, and investors can't help factor in the latest troubles when assessing the risk of buying its shares. ``It does have a negative angle, as Minsheng has a solid reputation and is regarded as having one of the better risk-management structures among mainland banks,'' said one Hong Kong-based banking analyst.

``If they are experiencing fraud, then what the hell is happening at the larger banks?'' he added.

Read the latest fraud here.
Of course there is always the possibility of a taxpayer funded bailout like the US$ 15 billion that IBCB recently was awarded.

The move comes after Beijing injected US$45 billion into Bank of China and China Construction Bank in late 2003. The central authorities were slow to offer assistance to ICBC, one of China's most troubled banks, until they were sure the first bailout was successful, observers said. By, in effect, forcing ICBC to come up with part of its own rescue package, Beijing signaled its reluctance to be seen as a lenient lender of last resort that will routinely bail out failing state-owned institutions.

Bad loans and fraud? So much fraud in China, if the economy does ever slow down, then these problems will overwhelm the fragile leadership there. But let me ask this question....Why should anyone be honest if the leadership in China are among the largest crooks there? Until China cleans up its own governments house, there will continue to be fraud, waste and corruption in the business community too. And it appears as if the Chinese Communist Party doesn't have the fortitude to do what it needs to do. Their solution is to get the populace to throw rocks at Japanese restaurants. Ha ha!