Bankers in China had a rollercoaster week. First they had to come to terms with the realization that they’ll have to wait until bonus season around Chinese New Year before adding to their luxury car collections, and not at Christmas like they’d planned. Rolls Royce said its cars are so expensive in China because of taxes – dashing any hopes of a seasonal discount.
Some also started sensing a foul, moldy smell coming from the laundry room, aka the loans department. Turns out the pile of bad debt that they had cast into the corner hoping nobody would notice had started to turn toxic. Luckily housekeeping was on hand to help out. Banking chiefs dressed in maid outfits hurled US$3.63 billion down the rubbish chute in black bin bags.
Settling their stomachs was news that the central government authorities were happy to let more banks grab capital from the stock market to throw at uneconomical projects in some remote province somewhere. Bank of Chongqing started its IPO roadshow on Wednesday and Huishang Bank may soon get in on the action to. If public offerings keep up at this rate the “Lords of Lujiazui” will be able to afford that second roller sooner than they expected.
But like any given week in China this one ended on an uncertain note, with money market rates surging to their highest in two months and prompting fears of another credit crunch.
Still, it could be worse. Try being a foreign retailer. Starbucks and Samsung were caught up in pricing and quality scandals while infant food maker Johnson Mead and drugmaker GSK were left counting the cost of messing up on compliance. Tokyo-based dairy maker Meiji decided enough was enough with this place and threw in the towel. Looks like local babies won’t be turning Japanese after all.