Abstract
The People’s Republic of China is the world’s second largest economy. Beginning in the 1980s, substantial economic growth combined with political and regulatory changes led to a dramatic increase in non-performing loans. By the turn of the century, 1/4 of loans held by Chinese banks were overdue. This article examines how China managed its non-performing loans, discusses bad debt in China today, and provides suggestions for how it should tailor its non-performing loan strategy as its economy continues to slow.
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