| After several years'reformation and innovation of Chinese banking industry, the rate of non-performing loans (NPLs) within domestic commercial banks has dropped drastically, and it seems that such issue has become moderate. However, according to the survey on NPLs market in 2009 by the research centre of China Orient Asset Management Corporation, the scale of such loan is still on the rise. With the data released by China Banking Regulatory Commission (CBRC). although the NPLs have been deprived by Chinese four major commercial banks, we may still need to concern about the NPLs. either the total amount or the percentage compared to the whole loans. In this article, the author believes that the key step to solve the NPLs is to analyze the major factors and find the solutions for such factors.In this article, the author first illustrated the definition of the NPLs and different means of NPLs classification. Then the author gave a brief explanation of related theoretical literature. Later, the author chose seven macroeconomics indices, which are Gross Domestic Product (GDP), Total Retail Sales of Consumer Goods. Gross Investment in Fixed Asset. Total Import and Export Volume. State Revenue. Monetary Aggregate (M2) and Stock Price Index (Shanghai Composite Index). Finally, the author used the approaches of correlation analysis and principal component regression analysis and did some positive analysis with the data of the above indices and from Chinese commercial banks since 2005.The research indicated that macroeconomics factors have negative correlations with NPLs. Among these factors. Fiscal Revenue and Export Volume have the major contribution to lower the amount of commercial bank NPLs. Meanwhile, macroeconomics factors have the positive facilitation to lower the amount of NPLs. Therefore, we could use several operational methods, such as expanding domestic demand and improving the external credit environment of commercial banks, to reduce the NPLs. |
PDF Full Text Request