AChinanon-bank
2019-02-20 18:19阅读：
When a brother in China calls to ask for money...
The New York Times,
By JOE ZHANG, Dec. 1, 2000
It was past midnight when my telephone rang. It was Hua-Liang, my
brother who lives in Jing-Men, a small city in Hubei Province in
central China.
'Do you have 1 million renminbi (about $120,000) to spare?' he
asked. 'Why?' I queried. 'I am planning a takeover bid for a
state-owned factory,' he replied.
The factory that Hua-Liang referred to is the city's largest
producer of vegetable oil. It was a cash cow for the city
government for many years.
But in the past five years it has been losing a lot of money,
putting much strain on the already shrinking local treasury. So,
the local government has finally decided to privatize the
factory.
I was shocked, not only by the demise of the plant but also by
Hua-Liang's revelation that this factory and many other big debtors
had just cost him a much cherished job as a banker.
Hua-Liang joined the city's largest credit u
nion, Golden Shrimp Credit Union, in 1987 after years of
unemployment. In 10 years, he rose through the ranks to become the
second-in-command. His was an envied job, well paid and most
respected.
But in the past few years he lived a miserable life as company
after company defaulted on their loans. The main reason: Prices of
property and manufactured goods have been steadily falling.
Companies had borrowed money on the assumption of stable or even
rising prices for their products.
Besides the defaults, Golden Shrimp's deposit base eroded in recent
years. As competition heated up, other banks set up branch offices
at just about every street corner. Golden Shrimp expanded as well,
even into outlying suburbs. In one branch where Hua-Liang used to
work, there were days when the branch did not record a single
transaction.
Golden Shrimp eventually slid into a 'liquidity crisis' — it could
not repay its depositors. For about three years, Hua-Liang's daily
job was to beg corporate borrowers to repay their loans and raise
short-term funds from banks to repay disgruntled depositors.
Sometimes he had to approach the local office of the central bank
to plead for financial support, but everytime he would receive a
harsh lecture.
Poor Hua-Liang, he had finally had enough and quit his job. My
parents, too, were very stressed out. They wept on the phone,
knowing that it would be nearly impossible for him to find another
job. Thousands of workers have been made redundant in that small
city in the past year alone. My nephew has been out of work for two
years since his graduation from a local technical college.
Hua-Liang told me about the vegetable oil factory he wanted to
acquire. The local economy was sluggish. As a result, the factory's
workers and well-connected officials in the city have squeezed
hundreds of their grown-up sons and daughters into the plant, which
is considered safe and stable. In the last five years the factory's
payroll rose fourfold, but demand was flat and output stayed almost
flat.
'How do you plan to make money out of this factory?' I asked
Hua-Liang. 'The company has excessive debts at present,' he said.
'I want to bid for its entire ownership, and ask the government or
the court to forgive the entire debt. I then have to slash the work
force to just 100. Within two years, it should become
profitable.'
Having worked for the central bank in Beijing in the 1980s myself,
I understand the enormous political barriers to Hua-Liang's
ambition. But he is not naive. Plenty of others have bought
inefficient state-owned companies and turned them around. And after
all, if he does not take the daring plunge, what else can he
do?
The writer, an analyst at an investment bank in Hong Kong,
contributed this comment to the International Herald Tribune.
