CHINA is bright spot because FACTS are hidden inside country and never spilled out

In the week ending on June 24th, 40 smaller Chinese banks disappeared and were absorbed by larger institutions. Not even at the height of the S&L crisis did lenders disappear at such a clip, reports The Economist.

The report tracks about 3,800 rural lenders in China, which hold $7.5 trillion in assets (13% of the country's banking system). The report claims that the lenders are struggling because they have too many bad loans, with some admitting that up to 40% of their loans are not being repaid. Most of the 40 failed banks were merged into Liaoning Rural Commercial Bank, created by regulators in September to handle these failing banks.

Many have lent to real estate developers and local governments, gaining exposure to China’s property crisis. In recent years, some have revealed that 40% of their books are made up of non-performing loans.