Some really amazing numbers are coming out of China. Caijing Magazine reports, in a tone of astonishment, that in the first quarter of 2008, Chinese banks "approved a combined 4.58 trillion yuan" ($671 billion U.S. dollars) "a remarkable cash surge equal to the total amount of bank lending for all 2008." (Found via China Digital Times.)
No wonder the Chinese economy is growing faster than anyone expected. China is spending so much on infrastructure improvements, reported the Wall Street Journal on April 30, (found via Brad Setser), that American companies like Caterpillar and Goodyear are seeing their earnings numbers pick up, as demand for excavating equipment and new tires surges.
The eagerness to extend credit is in sharp contrast to the behavior exhibited by American banks, which, despite multiple bailouts from the government, have been lending less and less each month since the financial crisis metastasized last October.
Then again, it helps when you own the banks.
Data indicates that the Big Four banks account for 50 percent of all loans in the industry -- and none is daring to relinquish a centimeter of market share.
More than business is at stake. Top executives at the Big Four banks are also government officials with vice minister-level positions. So in addition to caring for their banks, they are responsible for supporting the central government's economic stimulus policy.
Too bad the U.S. doesn't own any banks that it could force to lend out billions of dollars, thus juicing the economy and creating lots of jobs. Hey, wait just a minute...