The Amc, The Use Of Foreign Capital To Dispose Of Bad Assets

How to solve the Non-performing loans(NPL) problem is aworld-wide headache. Many countries in the world have set uptheir special institutions to settle the uprising NPL problemsin the banks, like RTC, which was under the leadership of FDICin US, Japanese bridge bank, DANAHARTA in Malaysia and KAMCOin Korea,etc. China established four Asset ManagementCorporations ( abbreviated as AMC in the article)in 1999, knownas Cinda, Huarong, Orient and Great Wall, to reduce the NPLsaccumulated in the commercial banks due to historical reasons.The four AMCs started their asset management and resolutionafter the first batch of NPLs amounted 1.7 trillion RMB waspeeled off from the respective four state-owned commercialbanks in 2000. But their performances are not satisfactory astheir resolution activities were limited by the social systemand the present legal framework.With the consideration of experience of other countries usingforeign capital to solve the NPL problem, this chapter comesto the conclusion that China still needs to attract and useforeign funds to help speeding up its NPL resolution in a moreefficient way so as to avoid the potential financial risks.