It's not the level of economic development that always determines a province's non-performing loan levels says a PBOC researcher. It can be something far more subtle - business ethics.
New research suggests that the non-performing loans which are dragging down China's banks are not distributed equally across the country or even that they are particularly high in the underdeveloped parts of the countries. Yi Gang, a researcher at the People's Bank of China, the country's central bank, says that regional attitudes to credit, closely linked to views on business ethics accounts for 70% of the explanation for bad loans, while ownership rights issues and management styles only explain 30% of existing NPLs.
As evidence...
