Is China heading for a banking crisis?

The sustainability of economic growth in China is likely to be the key macro call in emerging markets during 2004. We anticipate that the hoped for slowdown will not occur without much tougher action from the authorities, which could cause some disruption across the asset class, most notably in commodity related stocks. There is also a significant chance that over the coming years, China will suffer a drawn-out banking crisis, which will greatly reduce the potential of the economy to generate long-term sustainable growth. Accordingly we are treating Chinese equities with some caution and po...