China State firms lose $1.67 billion

Global Times reports that a recent study done by the Party School of the Central Committee showed that 68 central state-owned enterprises have suffered a net floating loss of $1.67 billion in the past ten years.

The Chinese officials linked the losses at 68 state controlled enterprises to derivative contracts. They moved the blame offshore by saying they are partly linked to “fraudulent practices” of foreign banks including commodities futures, swap rates, interest-rate swaps, options and structured deposits.

 

123Jump states that the report says foreign investment banks created most losses for Chinese enterprises by capitalizing on the inexperience of these SOEs in derivative markets.