Here’s a guy who lays out a thoughtful explanation of why the worldwide headlong rush into ICBC (and BOC, CCB, etc) is mortal folly. As he explains it, "I wouldn’t touch a Chinese bank with a ten-foot pole."
Certainly his argument is compelling. Chinese banks have bad lending practices. They are pressured to make loans to prop up failing SOEs and so end up with a ton of bad debt. They have relied on the government to save them from insolvency with injections of liquidity amounting to billions of dollars.
Not a good business to be in, to be sure. But why then do the likes of Goldman Sachs, Morgan Stanley, and UBS all want a piece of Chinese banks? Probably because the China story is dominating the economic headlines of the day, and growth throughout the country is off the charts. No matter how abhorrent their (former?) practices, China’s banks are going to play an integral role in the country’s development and everybody wants in.
It’s the same as the stock markets here. They’ve been in the tank since they were created 15 years ago and they’re still full of dogs. But eventually they have to turn, because the whole world has an interest in China right now and China is slowly letting them be a part of it. Naturally many of the punters lined up in Hong Kong to quickly turn a profit on a hot stock. But the big money is in China for the long haul – and its effect is bound to be a positive one.