Victor Shih |
At the end of April, Baotou-based Chinese billionaire Jin Libin set himself on fire to escape his creditors. His method of dealing with the situation was disturbing enough, but the structure of his debt was equally shocking. Investigators found that his billion renminbi business owed banks only 150 million RMB, but owed individual creditors and informal banks Rmb1.23bn.More in the blog of the Financial Times.
In other words, he owed private creditors and informal banks over eight times what he owed the banks. Although extreme, Jin’s debt situation suggests a highly risky debt bubble that seems to be growing without much control outside of the banking system.
Victor Shih is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch.
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