An Analysis of Loanword in Chinese Language
English Loan-words in Chinese

Tentative Study of English Loan-words in ChineseSubmitted to the School of Foreign Languages for Practicum in Using the English LanguageCONTENTSABSTRACT (i)摘要 (ii)1Introduction (1)2Why English loanwords come to China (2)2.1The social and historical factors (2)2.2Chinese traditional culture, the psychological factors (3)2.3The respective features of the English and Chinese languages (4)3The development of English loanwords in Chinese (5)3.1Coming in the 1980s (5)3.2Rising in the 1990s (6)3.3Booming in the 21st century (7)4Borrowing Methods of English Loanwords in Chinese (9)4.1Loan words borrowed phonetically and semantically (9)4.2Loan words translated according to their original meaning (10)4.3Loan words composed of both an English part and a Chinese part (11)4.4 A shift in the meaning of some established native Chinese Characters (11)4.5English “aliens” (12)4.5.1 Abbreviations (12)4.5.2 Oral English words (13)4.6Half loan word, half loan translation (13)4.7Borrowings imitating the English sound (14)5The influence of English loanwords in Chinese (16)5.1The creation of Chinese words (16)5.2The forms of transliteration and abbreviation (16)5.3Enlarging words in science, life and entertainment (17)5.4Deriving and composing many new words (17)6Conclusion (19)Bibliography (21)AbstractThe necessity and the development of the society are the basic conditions and strong power for the vocabulary expansion. With China’s opening and reform to the outside world, there is more communication between China and other countries, and with more media there is more information and convenience, which put forward modern Chinese to enrich its vocabularies.Borrowing loan-words is one important means to recognize new things. This paper probes into language borrowing, especially the lexical borrowing between the two languages, English and Chinese. By introducing factors of English loan words’coming into the Chinese language, summarizing the development of English loanwords in Chinese, analyzing different borrowing methods and exploring the influence and meaning of English loanwords in Chinese, this paper draws the conclusion that loanwords cannot be used at random or created with imagination.Key Words: English loan-words, National cultural psychology, Language, Society摘要社会的发展和对词汇的需求量成为了词汇发展的基本条件和强大推动力。
英语语言学判断题

判断题:正确写A,错误写BChapter1:1.Linguisticsisthesystematicstudyoflanguage.True.2.Linguisticsdealswithaparticularlanguage.False.3.Linguisticsisscientificbecauseitishelpfultolanguageuse.False.4.Thetaskofalinguististodiscoverthenatureandrulesoftheunderlyinglanguagesystem.True.5.Linguisticsisgenerallydividedintogeneralandspecificlinguistics.False.6.Generallinguisticsdealswiththegeneralaspectsoflanguageapplication.False.7.Generallinguisticsdoesnotstudytheoriesoflanguage.False.8.Phoneticsstudieshumansoundpatterningandthemeaningofsoundsincommunication.False.9.Phonologystudieshowasoundisproduced.False.10.Morphologyisthestudyofsentences.False.11.Syntaxisthestudyoftherulesofwords.False.12.Semanticsisthestudyofwordmeaning.False.13.Pragmaticsisthestudyofmeaningincontextoflanguageuse.True.14.Sociolinguisticsdealswiththerelationbetweenlanguageandsociety.True.15.Psycholinguisticsdealswiththerelationoflanguagetopsychology.True.16.Appliedlinguisticsmeansthelanguageapplicationtospecificareas.False.17.Modernlinguisticsaimsatprescribingmodelsforlanguageuserstofollow.False.18.Synchroniclinguisticsdealswithaseriesoflanguagephenomenaatthesametime.False.19.Diachroniclinguisticsisalsocalledhistoricallinguistics.True.nguemeanscompetence.False.21.ParoleisaFrenchword;itmeanstheconcretelanguageevents.True.22. F.deSaussurewasaSwisslinguist.True.23.N.ChomskyisanAmericanlinguist.True.24.AccordingtoChomsky,theinternalizationofasetofrulesabouthislanguageenablesaspeakertopr oduceandunderstandaninfinitelylargenumberofsentencesandrecognizesentencesthatareungramm aticalandambiguous.True.25.Chomskyregardscompetenceasanactofdoingthingswithasentence.False.26.PerformanceisthefocusofChomsky'slinguisticstudy.False.Competence,instead.27.Detailsoflanguagesystemaregeneticallytransmitted.False.28.Displacementoflanguagemeanslanguageuseinafar-awayplace.False.29.Arbitrarinessoflanguagemeanslanguagecanbeusedfreely.False.30.Dualityoflanguagemeanslanguageisatwo-levelsystem.True.Chapter2:1.Writingismorebasicthanspeech.False.2.Therehavebeensome2,500languagesintheworld.False.3.Abouttwothirdsoflanguagesintheworldhavenothadwrittenform.True.4.Linguistsareinterestedinallsounds.False.5.Thelimitedrangeofsoundsthataremeaningfulinhumancommunicationconstitutethephonicmed iumoflanguage.True.6.Phoneticsimilarity,notphoneticidentity,isthecriterionwithwhichweoperateinthephonologicala nalysisoflanguages.True.7.Thegreatestsourceofmodificationoftheairstreamisfoundintheoralcavity.True.8.Thenarrowingofspacebetweenthehardpalateandthefrontofthetongueresultsinthesound[j].True.9.[k],[g]and[n]arevelarsounds.False.10.[i]isasemi-closevowel.False.11.[h]istheglottalsound.True.12.[ei]isamonophthong.False.13.Phonologyisofageneralnature.False.14.Phoneticsdealswithspeechsoundsinallhumanlanguages.True.15.Aphonedoesnotnecessarilydistinguishmeaning.True.16.Aphonemeisaphoneticunit.False.t.17.‘Tsled'isapossiblewordinEnglish.False.18.Englishisatonelanguage.False.Chapter3:1.Theword‘predigestion'iscomposedof twomorphemes.False.2.‘Teach-in'isacompoundword.True.3.Pronounsbelongtoclosedclasswords.True.4.Theword‘unacceptability'hasfourmorphemes.True.5.Theword‘boy'isafreemorpheme.True.6.T hemorpheme‘—or'in‘actor'isani nflectionalmorpheme.False.7.The-sin‘works'of‘Heworkshard.'isaboundmorpheme.False.8.Theword‘unsad'isacceptableinEnglish.False.poundingisaverycommonandfrequentprocessforenlargingthevocabularyoftheEnglishlan guage.True.10.Theprefixa-in‘asexual'means‘without'.True.Chapter4:1.Phrasescanconsistofjustoneword,butmoreoftentheycontainotherelementsaswell.True.2.InXP,XreferstoanysuchheadasN,V,AorP.True.3.In‘abookaboutghosts',thecomplementis‘ghosts'.False.Thecomplementis‘aboutghosts'.4.InTG,determinerisoftenwrittenasDet.True.Chapter5:1.Hyponymyisarelationofexclusionofmeaning.False.2.Thewords‘alive'and‘dead'arerelationalopposites.False.3.Thewords‘lead'(领导)and‘lead'(铅球)arehomographs.True.4.Thewords‘flat'and‘apartment'arestylisticsynonyms.False.5.Thewords‘politician'and‘statesman'arecollocationalsynonyms.False.6.Thewords‘buy'and‘purchase'are dialectalsynonyms.False.7.Thewords‘shock'and‘surprise'aresemanticallydifferentsynonyms.True.8.Inthesenseset<freshman,sophomore,junior,senior>,‘junior'and‘senior'are co-hyponyms.True.9.Thewords‘doctor'and‘patient'arerel ationalsynonyms.True.10.‘IhavebeentoBeijing.'entails‘IhavebeentoNorthChina.'True.11.‘Hisfriendiscoming.'presupposes‘Hehasafriend.'True.12.‘Maryissingle.'isinconsistentwith‘Maryismarried.'True.13.‘HisdumbboyspokegoodEnglish.'isacontradiction.True.Chapter6:1.Pragmaticsisalinguisticbranchthatdevelopedinthe1890s.False.2.CourseinGeneralLinguisticswaspublishedin1889.False.3.Contextreferstotherelationbetweenlinesorparagraphsofatext.False.4.IfIsaidtoyou,‘It'sverystuffyhere.',thenmyillocutionaryactmaybeaskingyouto switchonthe air-conditioner.True.5.IfSmithsaidtoyouinasupermarket,‘Iamthirstynow,butIhavenomoneywithme',thenhisperl ocutionaryactisyourbuyinghimacoca-cola.True.6.AccordingtoAustin,‘Heisaboy.'isaconstative.True.7.AccordingtoAustin,‘Ibetyousixpenceitwillbefinethisevening.'isaperformative.True.8.‘Openthedoor!'isadirective.True.9.‘Theroomisair-conditioned.'isanexpressive.False.10.‘Wehavenevermetbefore.'isarepresentative.True.11.‘Ifireyou!'isacommissive.False.…isadeclaration.12.‘Iwillreturnthebooktoyousoon.'isanexpressive.False.13.‘Donotsaywhatyoubelievetobefalse'isamaximofrelation.False.14.‘Bebrief'belongstothemaximofmanner.True.15.‘Make yourcontributionasinformativeasrequired(forthecurrentpurposeoftheexchange) .'belongstothemaximofq uality.False.16.B'sreplyviolatesthemaximofqualityinthedialoguebelow:A:Wheredoyoulive?B:InSouthChinaNormalUniversity.False.17.Bprobablymeansthathedoesn'twanttomakeanycommentonthelecture,inthe dialoguebel ow:A:Whatdoyouthinkofthelecture?(Thespeechmakeriscoming)B:Dowehaveclassesthisevening?True.18.Bprobablymeansthatitisimpolitetoaskaboutherage,inthedialoguebelow:A:Howoldareyou?B:Iam80.True.19.BprobablymeansthatAshouldnotlaughathimsincetheyknoweachother,inthedialoguebelow:A:Areyouagoodstudent?B:Areyou?True.Chapter7:1.Soundchangestendtobesystematic.True.2.Theword‘home'waswrittenas'ham'inOldEnglish.True.3.Theword‘mice',whichispronouncedas[mais],waspronouncedas[mi:s]inMiddle English.True.4.InChaucer'stheCanterburyTales,wecanfind‘his'toreplace‘it'inModernEnglish,asin‘Wha nthatAprillewithhisshouressooth'.Thisreflect sthechangeinthe‘agreement'rule.True.5.‘Ilovetheenot.'beforethe16thcentury,hasnowbecome‘Idonotloveyou.'This meansthechan geinnegationrule.True.6.TheEnglishpronoun‘our'hasexperiencedaprocessofsimplificationfromOld English.True.7.Theword‘fridge'isaloanword.False.8.Theword‘walkman'isablend.False.9.Theword‘mike'isaclippedword.True.10.Theword‘videophone'isanacronym.False.11.UNESCOisablend.False.12.Theword‘quake'isthe resultofback-formation.False.13.ISBNmeansInternationalStandardBookNumber.True.14.Theword‘baby-sit'isawordfromback-formation.True.15.Theword‘question'isawordborrowedfromFrench.True.16.Theword‘tea'isaloanwordfrom Chinese.True.17.Theword‘education'comesfromLatin.True.18.Theword‘dinner'comesfromFrench.True.19.Theword‘beer'comesfromGerman.True.20.Theword‘meat'weusenowhasgonethroughthenarrowingofmeaning.True.21.Theword‘holiday'hasgonethroughthewideningofmeaning.True.22.Theword‘silly'usedtomean‘happy'inOldEnglish.True.23.Theuseoftheexpressions‘toupdate',‘tohost'and‘tocheckup'indicatesthe influenceofAmer icanEnglish.True.puterlanguageisoneofthesourcesthathaveinfluencedtheEnglishlanguage.True.25.Onepossibleaccountoftheincreasinguseof‘cheap'insteadof‘cheaply'in‘Hegotitcheap.'is thatofthe‘theoryofleasteffort'.True.26.Theexpression‘It'sme'isNotacceptableinEnglish.False.Chapter8:1.Theterm‘diglossia'wasfirstusedbyFergusonin1959.True.2.Pidginscamefromablendingofafewlanguages.True.3.Atypicalexampleofabilingualcommunityisanethnicghettowheremostoftheinhabitantsareeithe rimmigrantsorchildrenofimmigrants.True.4.Differentstylesofthesamelanguagecanberevealedthroughdifferencesatsyntactic,lexicalandph onologicallevels.True.5.Oneofthemostimportantfeaturesofbilingualismisthespecializationoffunctionofthetwovarietie s.False.6.Of‘reply'and‘answer',thelatterismoreformal.False.7.M.A.K.HallidayisaBritishlinguist.True.8.Thedeletionofthelinkverb‘be'asin‘Youcrazy'istypicalofthe syntaxofBlackEnglish(1,2).True.9.AprominentphonologicalfeatureofBlackEnglishisthedeletionoftheconsonantat theendofaword ,asin‘desk'[des].True.10.Theuseofsuchsentencesas‘Iain'tafraidofnoghosts'tomean‘I'mnota fraidof ghosts'isoneoft hesyntacticfeaturesofBlackEnglish.True.11.Accentisanimportantmarkerofsociolect.True.12.ReceivedPronunciationinBritishEnglishisadialectofLondonthatisrepresentativeofstandardE nglish.False.13.AnRPaccentoftenservesasahighstatusmarker.True.Chapter9:1.Theword‘dog'oftenconjuresupdifferentimagesintheUSandHongKong.True.2.PeopleintheWestEndinLondonspeakdifferentlyfromtheEastEnders.True.nguageplaysamajorroleinsocializingthepeopleandperpetuatingculture,especiallyinprintfor m.True.4.TheEskimoshavefarmoreword sforsnowthantheEnglishnativesinthat‘snow'is morecrucia ltothelifeoftheformer.True.5.FortheBritishpeople,theChinesegreeting‘Haveyouhaddinner?'wouldturninto‘It'sfinetoda y,isn'tit?'.True.6.ItisstandardpracticeforanEnglishnativestudenttogreethisteacherbeforealecture bysaying‘Go odmorning,teacher!'.False.7.TheChinese‘uncle'meansthesameastheBritish‘uncle'.False.8.ItisproperinEnglishtosay‘no,no'inresponsetosuchapraiseas‘You'vemadegoodprogress.' toshowone'smodesty.False.9.YoucanneveraskanEnglishnativethequestionofhisnameorage.False.10.InEnglish,theword‘blue'isassociatedwithunhappyfeelings.True.11.Itisacceptabletotranslate‘Everydoghashisday.'into‘每条狗都有自己的日子。
AnalysisonEnglis...

AnalysisonEnglis...第一篇:Analysis on English and Chinese advertising language universals分析英汉广告语言的共性摘要:本英国硕士论文从消费心理入手研究了广告语言对消费者几种消费心理的影响,指出英汉广告语言的共性必须是善于捕捉人们的心理活动,在创意上通过语言、形象的渲染,来博得消费者的认同与共鸣。
一、引言广告的目的在于将广告信息传达给消费者,以促使消费者采取有关的消费行为。
美国学者 Lewis 曾提出过“注意(Attention)、兴趣(Interest)、欲望(Desire)、行动(Action)”原则,这一原则揭示了广告实现其效果的心理过程,认为广告要实现其效果,必须能够引起消费者的注意,激发其兴趣,唤起其购买欲望,最终引导消费者作出购买选择。
可见,消费者的消费行为并不是简单的机械活动,相反,它是一个复杂的、伴随着人的心里活动和行为的过程,它既要受动机的支配,又要受消费需要的影响。
因此,要开启成功广告的大门,就必须研究广告语言和消费者的消费行为,了解消费者的心理活动。
二、英汉广告语言与消费心理广告离不开语言,广告的信息主要靠语言来传递,任何一则富有魅力的广告语言,都来自于对消费者的了如指掌。
因此,广告语言要集中反映消费者的需求、动机和选择,能否抓住消费者的消费心理去引导消费,这一点显得尤为重要。
然而,由于人们的消费意识和消费观念不同,因此,受其支配的消费心理也千差万别,总的来说,现代人的消费心理主要表现在:1、追求时尚、新颖和美的心理时尚的东西,总是新潮的,总是领导消费的。
现代社会,人们大都表现出一种追求商品的趋时和新颖,消费者在购买商品时十分看重商品的款式和流行样式,以满足其对未来追求的心理欲望,实现其好奇心。
同样,爱美是人的天性,美能给人们的内心带来愉悦感、幸福感。
随着现代社会的进步,人们生活水平的提高,人们对自身美化和产品美感的渴求越来越强烈。
什么是借词

什么是借词?What is loanword?借词的定义有广义和狭义之分。
狭义的借词指语言是带有严格等级划分的系统结构,主张把借词的概念限定在因音译而变换的词汇。
广义的借词指除语言学这一维度外,也应把社会、文化因素纳入研究借词的范畴。
“不论语音上的模仿还是语义上的模仿,新词都放映了外来语言文化的影响。
【3】There is a general and narrow definition of loanword. Narrow loanword refers that language is a system organization with strict grade division. It advocates limiting the concept of loanword in the lexicon which changes due to transliteration. General loanword means that we should take social and cultural factors into consideration when studying loanword. Whether it is imitation in phonetic sound or semantic meaning, neology reflects itself influenced by foreign language culture.英语的词汇众多,表达丰富,这与其善于借用不同民族和文化的语言密不可分。
其中汉语的丰富英语词汇方面功不可没。
在英语各类借词的来源中,汉语的数量排第11位。
[4] 汉语借词主要是通过意译、翻译借词等形式。
There are numerous vocabularies and rich expression in English. And that’s deeply related to its frequently using different national and cultural languages. Among them, abundant English vocabularies of Chinese make great contributions. In the origin of kinds of loanword, the number of Chinese ranks 11th. Chinese loanword represents it mainly by the means of free translation and translation.音译借词这是一种语言吸收外来语最快和最直接的方式。
金融英语期末试卷

documents.学年度第一学期《金融英语》2011 -2012 ( ) 3. In documentary credit, the issuing bank is usually a bank located in the beneficiary's country.( ) 4. An advising bank or notifying bank is the bank that advises the applicant that a letter of credit 卷期末考试A(L/C) has been issued, confirmed, or amended.( ) 5. Acceptance must be made at the back of the bill and signed by the drawee.( ) 6. In cheque transactions, the drawer and the payer are the same person. 姓名专业年级学号( ) 7. Both a crossed cheque and a open cheque can be cashed over the counter.( ) 8. Education loan is, just one tpye of amortization loans.( ) 9. Short-term loans are often used to satisfy fixed asset investment whereas medium andlong-term loans are often used to finance working capital needs.( ) 10. By barter, it means that people use goods to trade for other goods made by other people.Ⅳ. Choose the best answer.(2分/题,10题共20分)( ) 1. The first modern international monetary system was the _________?Match the words in the left column with the proper chinese equivalents in the right Ⅰ.A gold standard B Bretton Woods Systemcolumn.10 points,1 point for each )(C Jemaica System D European Monetary SystemA 通货膨胀( ) 1 financial assets( ) 2. Used to settle official transactions at the IMF, ______ are sometimes called paper gold.B 托收行( ) 2 executiveA dollarsB ECUsC 金融资产( ) 3 barterC SDRsD all currenciesD 有利可图的( ) 4 installment( ) 3. The ____fees are one-time charges negotiated in advance and imposed when the loan机密的 E ( ) 5 profitableagreement is signed.) 6 recipient ( 分期付款 FA managementB front-end 指定的人G ) 7 ( orderC commitmentD participation( 行政人员H ) 8 inflation( ) 4. The person paying the money is _______ of a cheque.I 物物交换) 9 confidental (A the draweeB the endorser ( 收信人J ) 10 remitting bankC the payeeD the endorsee( ) 5. The documents will not be delivered to the buyer until ________.分)105题,(II.Give the full name to the following words.2分/ 题共A the buyer has cleared goods B the goods have arrived ______________________________ ECU .1C the bill is paid or accepted D both A and B______________________________ IMF .2( ) 6. If it is not stated as D/P or D/A, the documents can be released_________.______________________________ SDRs 3.A against acceptance pour avalB against acceptance 4. D/A_______________________________C against paymentD in either way.5CPA ________________________________ ( ) 7. Under_____, no draft is drawn. It is also used as a means of avoiding the stamp duty(10分). Decide whether each of the following statements is true(T) or false(F). Ⅲpayable on drafts.the ( personal with be not should transactions Business 1. ) confused Similarly, transactions.A the acceptance creditB the derferred payment credit transactions of different entities should not be accounted for together.D the negotiated creditC the payment credit ) 2. A usance credit means a credit which stipulates the immediate payment on presentation of(( ) 8. ________is the bank to which the pricipal has entrusting the collection.“We needed furniture(家具) for our living room.”Says John Ross, “and we just didn't have enough money to buy it. So we decided to try making a few tables and chairs.”B The collecting bank John got married six A The remitting bankmonths ago, and like many young people these days, they are struggling to make a home at a time when D Both A and BC The presenting bankthe cost of living is very high. The Rosses took a 2-week course for $ 280 at a night school. Nowthey ) 9. Which principle has the assumption that the business will continue in operation?(build all their furniture and make repairs around the house.B The going-concern concept A The cost principleJim Hatfield has three boys and his wife died. He has a full-time job at home as well as in a shoe C The matching principle D Both A and Bmaking factory. Last month, he received a car repair bill for $ 420. “I was deeply upset about it. Now I ( ) 10. _______ is the most important part of a bank letter.have finished a car repair course, I should be able to fix the car by myself.” B Body ASubjectJohn and Jim are not unusual people. Most families in the country are doing everything they can to D SignatureC Complimentary closesave money so they can fight the high cost of living. If you want to become a “)do-it-yourself”, you can Ⅴ. Translate the following sentences. (20分go to DIY classes. And for those who do not have time to take a course, there are books that tell you 1. The usual way wordor by writing stamping the the drawee accepts a draft iss authorized signature and the ACCEPTED” on the face of the draft, plus the drawee'“how you can do things yourself.1. We can learn from the text that many newly married people _______. date accepted.that theA. find it hard to pay for what they need verify reasonable good 2. Banks wiil act in faith and exercise care and mustdocuments received appear to ba as listed in the collection order. B. have to learn to make their own furniture.C. take DIY courses run by the government. hospitals, as churches, most government agencies, andsuch 3. Nonprofit organizationscolleges use accounting information in much the same way that profit oriented businesses D. seldom go to a department store to buy things2. John and his wife went to evening classes to learn how to _____ do.4. 用货币作为交换媒介是货币的主要职能之一。
起源于中国的那些英语词汇

起源于中国的那些英语词汇English words from Chinese words are often denoted as being 'loanwords.' A loanword is one that does not share a literal translation of the word. Rather the word is based on the adopted language. Quite simply, the word is borrowed and then co-opted into the new language.那些来自于中国的词汇通常都被称之为“外来词汇”。
这种词不是逐个字翻译过来的,而是基于这种外来语言的。
简单来说就是,这个词汇是从别处借过来的,然后用到一种新的语言之中。
1. Gung Ho工合Pronounced gōng hé in Mandarin. The literal translation is,"work together." The English use was popularized by Marines fighting in the Pacific in World War II. The phrase came to mean: "whole heartedly enthusiastic, and loyal, eager, and zealous."在普通话里的发音为gōng hé,意思是“合作、同心协力”。
在英语中广泛被使用是二战时期海军陆战队在太平洋作战时期。
这个短语的意思是:“竭诚热情,忠诚、愿望、热心。
”2. Typhoon台风Pronounced dàfēng in Mandarin and tai fung in Cantonese. The literal translation is "strong wind." Experts say the term, typhon from the Greek and Arabic, was strengthened with the Chinese translation.在普通话中的发音为:dàfēng,广东话的发音为:tai fung。
汉语借用英语外来词的特点及语用理据

汉语借用英语外来词的特点及语用理据全文共10篇示例,供读者参考篇1Hey guys, today I'm gonna talk to you about the special features and language rules of Chinese words borrowed from English. It's gonna be super fun and interesting, so let's dive right in!First of all, did you know that Chinese has borrowed a ton of words from English? These words are called "" (wàiláicí), which means "foreign words". They are usually used to describe modern technology, fashion, or other new concepts that didn't exist in traditional Chinese culture. For example, words like "" (shǒujī - cell phone), "" (diànnǎo - computer), and "" (cháoliú - trends) are all borrowed from English.One cool thing about these borrowed words is that they often keep their original pronunciation and spelling. So even though they look different in Chinese characters, you can still recognize the English sound. For example, the word "" (qiǎokèlì - chocolate) sounds just like the English word "chocolate".Another interesting thing is that borrowed English words can be used in a more casual or slangy way in Chinese. For example, instead of saying "" (xièxie - thank you), you might hear people say "Thx" or "" (xièxie xièxie - thanks thanks) to be more casual and friendly.In conclusion, the borrowed English words in Chinese add a modern and international flavor to the language. They make it easier to talk about new things and communicate with people from different cultures. So next time you hear a borrowed English word in Chinese, remember how cool and useful it is! Thanks for listening, guys!篇2I'm going to talk about some cool words we use in Chinese that we borrowed from English! We call them "" or "" in Chinese, which means "loanwords". These words make our language more interesting and international. Let me tell you some of them and explain why we use them.First, let's talk about ""(qiǎo kè lì), which means chocolate in English. We borrowed this word from English because it's easier to say and remember than the Chinese word for chocolate, ""(zhū gǔ lì). Plus, it sounds fancy and cool, just like chocolate itself!Next, we have ""(shǒu jī), which means mobile phone in English. This word is also borrowed from English because it's a popular and modern invention. The English word "mobile phone" is too long and hard to remember, so we use "" instead. It's short, sweet, and easy to say!Another example is ""(kā fēi), which means coffee in English. We borrowed this word because coffee is a popular drink all over the world. The Ch inese word for coffee, "" (kā fēi), is easy to pronounce and sounds similar to the English word. It's a perfect match!Lastly, let's talk about ""(bǐng gān), which means cookie in English. We borrowed this word because cookies are a delicious snack tha t everyone loves. The Chinese word for cookie, "" (bǐng gān), is easy to say and sounds cute. It's a fun word to use when we're talking about yummy treats!In conclusion, borrowing words from English makes our language more colorful and fun. These loanwords are easy to say, remember, and use in everyday conversations. They help us connect with people from different cultures and countries. So next time you hear a loanword in Chinese, remember that it'sthere to make our language more interesting and international! Thanks for listening!篇3Hello everyone! Today, I'm going to talk about the special features of borrowing English words in Chinese. It's really cool how we use English words in Chinese, isn't it?First of all, do you know why we borrow words from English? Well, sometimes Chinese doesn't have a word for something new, like "computer" or "internet", so we borrow the English word instead. This makes it easier for us to talk about these modern things. It's like we're adding new words to our language!Another reason we borrow English words is because they sound cool. Have you ever noticed how some English words just sound more exciting or fun than Chinese words? That's why we like to use them in Chinese. It makes our language more interesting and diverse.But wait, there's more! When we borrow English words, we often give them our own Chinese twist. We might change the pronunciation a little bit, or use them in a different way. This shows how creative we are with language!So, next time you hear an English word in Chinese, remember that it's not just a random choice. There's a reason why we borrow words from English, and it's all part of the beauty of language. Let's keep having fun with English words in Chinese!篇4Hello everyone! Today we're going to talk about Chinese borrowed words from English and their characteristics and usage.First of all, you might be wondering, what are borrowed words? Well, borrowed words are words that come from one language to another language. In this case, English has loaned some words to Chinese, and they have become a part of everyday language.One of the characteristics of Chinese borrowed words from English is the pronunciation. Since Chinese and English are very different languages, the pronunciation of borrowed words might be a bit different from the original English word. For example, the English word "computer" is borrowed into Chinese as "" (diàn nǎo), with a different pronunciation but the same meaning.Another characteristic is the written form of borrowed words. When English words are borrowed into Chinese, they are oftenwritten using Chinese characters that sound similar to the English word. For example, the English word "coffee" is borrowed into Chinese as "" (kā fēi), using characters that sound like the English word.In terms of usage, Chinese borrowed words from English are often used in everyday conversation, especially among young people. They add a trendy and modern element to the language. For example, words like "" (shǒu jī) for "cell phone" or "" (dān shēn) for "single" are commonly used in Chinese conversations.In conclusion, Chinese borrowed words from English have become an important part of the language, adding a fresh and modern touch to everyday communication. So next time you hear someone using a borrowed word in Chinese, don't be surprised – it's just the language borrowing a little bit from English to make things more interesting! Thank you for reading!篇5Hello everyone! Today I'm going to talk about a super cool topic - the borrowed words from English in Chinese!You know, Chinese is a really old language with thousands of characters, but lately we've been borrowing a lot of words from English. It's like mixing two awesome things together!it makes us sound super smart and cool. Like when we use the word "coffee" instead of the traditional Chinese word for it. It's like we're saying, "Hey, I'm hip and trendy!"Another reason is that some English words just fit better in certain situations. Like when we say "OK" instead of "" or "." It just sounds more natural, you know?But we also have to be careful with how we use borrowed words from English. We need to make sure they make sense in Chinese and that people understand what we're trying to say. Otherwise, it can get really confusing!Overall, borrowing words from English can be a fun way to mix things up in our language. So next time you hear someone use an English word in Chinese, just remember - it's all about being cool and trendy!篇6Well, you know, there are some really cool words in Chinese that actually come from English! It's like a fun little language exchange between the two languages. These borrowed words, or loanwords, bring a whole new flavor to Chinese and make it even more awesome.is because it gives Chinese speakers a way to talk about new things that didn't exist before. Like, for example, the word "computer" in Chinese is "" (diànnǎo), which comes from the English word "computer." Can you imagine trying to explain what a computer is without using that word? It would be so hard!Another reason for borrowing words from English is because it makes Chinese sound more modern and hip. You know, like when you say "cool" or "awesome" in Chinese, it just adds that extra bit of coolness to your language. Words like "" (shǒujī) for "cell phone" or "" (wǎnghóng) for "internet celebrity" make Chinese sound super trendy and up-to-date.But wait, there's more! Borrowing words from English can also make it easier for Chinese people to connect with the rest of the world. Like, when you hear words like "" (kāfēi) for "coffee" or "" (yīnyuè) for "music," it makes it easier for Chinese speakers to talk to people from other countries. It's like a secret code that helps us all understand each other better.So, next time you hear a borrowed word in Chinese, remember that it's not just a random word – it's a cool little bridge between Chinese and English that makes both languages even more awesome. Keep on borrowing, Chinese!篇7Once upon a time, there were lots of English words that came to Chinese, and they became our friends! These English loanwords brought us new ways to express ourselves and helped us connect with the world. Let's learn more about them!First of all, let's talk about the special characteristics of English loanwords in Chinese. These words are like guests from another country, bringing with them a unique charm. They are often used in trendy and fashionable contexts, making our language more colorful and diverse. For example, "coffee" is a loanword from English that has become a popular drink in China. People can now enjoy a nice cup of coffee while chatting with friends or working on their laptops.Moreover, English loanwords have also enriched our language by providing us with new vocabulary. For instance, words like "internet" and "computer" have become essential in our daily lives. Thanks to these loanwords, we can talk about modern technology and stay connected with others around the world. Isn't it cool how these words have made our lives easier and more convenient?In addition, the use of English loanwords in Chinese reflects the influence of globalization. As our world becomes more interconnected, it is important for us to embrace different cultures and languages. By using English loanwords in our daily conversations, we are showing our openness to new ideas and our willingness to adapt to a changing world.In conclusion, English loanwords have become an integral part of the Chinese language, adding richness and diversity to our vocabulary. Let's continue to embrace these words and celebrate the beauty of cultural exchange. Let's keep learning and exploring the world through language!篇8Hello everyone! Today I want to talk about some Chinese words that borrow from English. I think it's super cool how languages can mix together like that!One of the words that we use in Chinese that comes from English is "" (diànnǎo), which mea ns computer. Isn't that neat? We just took the English word "computer" and made it our own! It's so fun to see how words from one language can be used in another.Another word is "" (shǒujī), which means cellphone. We got that from the English words "cell" and "phone" and put them together to make a new word in Chinese. I love how creative language can be!Some people might wonder why we borrow words from English instead of just using Chinese words. Well, sometimes it's easier to use a borrowed word because it's already familiar to a lot of people. Plus, it's just fun to mix languages together and see what comes out!I think it's really cool how languages can influence each other like that. It shows how connected we all are, even if we speak different languages. And who knows, maybe one day we'll see even more words borrowed from English in Chinese! Language is always changing and growing, just like us.So next time you hear a word in Chinese that sounds like English, remember that it's just a fun way for languages to mix and play together. Isn't that awesome? I think so! See you next time, friends!篇9My topic today is about the use of English loanwords in Chinese and why do we use them. So, what are Englishloanwords? They are words borrowed from English into Chinese and used in our daily conversations. For example, we often say "coffee" instead of (kāfēi), and "pizza" instead of (pīsà).There are several reasons why we use English loanwords in Chinese. Firstly, it makes us sound more trendy and modern. Using English words can make us seem cool and international. It's like we are keeping up with the latest trends and fashions. Secondly, some English loanwords are just easier to pronounce or remember than their Chinese counterparts. For example, it's much simpler to say "OK" than (hǎo de) in some situations. Lastly, the use of English loanwords can also help save time and space. Instead of using a long Chinese sentence, we can just use a short and simple English word to convey the same meaning.However, we should also be careful when using English loanwords in Chinese. Sometimes, overusing these words can make us sound pretentious or show-offy. We should always consider the context and the audience before using English loanwords in our conversations.In conclusion, the use of English loanwords in Chinese can be fun and useful. It adds a unique flavor to our language and helps us express ourselves in a more interesting way. But remember, moderation is key! Let's keep using Englishloanwords in Chinese wisely and make our language more diverse and colorful.篇10Oh! Hi everyone! Today I want to talk about something super cool – Chinese words borrowed from English! Do you know that there are so many English words that we use in Chinese? It's so fun to see how languages can mix together like that.One of the reasons why we borrow English words is because they often describe new things or concepts that we don't have words for in Chinese. For example, have you heard of "" (shǒujī)? It means "mobile phone" in English. But in Chinese, we just say "" because it's easier to say and everyone knows what it means.Another reason why we borrow English words is because they sound cool and modern. Like "" (cháoliú) – it means "trend" in English. Doesn't it sound so trendy and hip? It's like we're saying, "Hey, I know what's cool and I'm up-to-date!"Some people might say that borrowing English words is a bad thing because it might make our language less pure. But I think it's okay as long as we still keep our own Chinese words too.It's like mixing different colors to make a beautiful painting –each color is important.So, next time you hear a Chinese word that sounds like English, remember that it's just our way of adding a little extra flavor to our language. Isn't that neat? Let's keep learning and exploring new words together! Bye-bye!。
Dealing With the Bad Loans of the Chinese Banks

Dealing with the Bad Loans of the Chinese Banks By: John P. Bonin and Yiping HuangWorking Paper Number 357January 2001Dealing with the Bad Loans of the Chinese BanksJohn P. BoninDepartment of EconomicsWesleyan UniversityandWilliam Davidson InstituteUniversity of Michigan School of BusinessYiping HuangSalomon Smith Barney and CitibankandAustralian National UniversityAbstractChinese banks suffer from serious financial fragility manifested by high proportions of non-performing loans and low capital-adequacy ratios. A key policy introduced recently by the Chinese government to reduce financial risks is the establishment of four asset management companies (AMCs) for dealing with bad loans. Drawing on the experiences of the Resolution Trust Corporation in the United States and bank restructuring in the Central European transition economies, we argue that the original AMC design will not be successful in resolving the existing non-performing loans (NPLs) nor will it prevent the creation of new bad loans. We recommend a modification of the current proposal that redefines the relationships between the parent banks and the AMCs by transferring the deposits of problem enterprises along with their NPLs from parent banks to AMCs.JEL Classification Numbers: G21, P34Key words: Bad loans, State-owned banks, Asset Management Companies, ChinaNon-Technical SummaryChina’s banking sector is dominated by four large multi-purpose, extensively branched, state-owned banks (SOBs) that account for more than 70% of both credits to enterprises and household deposits. From the late 1970s to the late 1990s, the financing responsibility for large state-owned enterprises (SOEs) shifted from the fiscal budget to these SOBs. During this period, fiscal revenues to GDP fell from 30% to 12% while bank loans to GDP increased from 50% to 120%. By the mid-1990s, over one-half of SOEs were making losses and about three-quarters of the loans on the books of these banks were to SOEs. Many of these loans should be classified as non-performing. By 1999, three of these SOBs would be insolvent, if assets were marked to market, although all four remain highly liquid because of their dominant share of household deposits in an economy with a high savings rate and few competing assets for household portfolios.In the mid-1990s, the Chinese authorities engaged in a series of reforms to deal with the bad loans problem culminating in the creation of four asset management companies (AMCs), one for each bank, to take on these bad loans. This paper looks briefly at the international experience with AMCs, focusing on the U.S. Resolution Trust Company upon which the Chinese reform was modeled, and summarizes the experiences of three fast-track transition countries in dealing with bad loans to draw implications for China’s program. First, bad loan recovery will be much more difficult in China than in the U.S. due to the extent of the problem, the nature of the assets, and the nascent state of China’s capital markets. Second, transition experiences point to the crucial importance of dealing with the flow problem of new bad loans. This incentive problem was handled successfully in Hungary by separating weak clients from banks and privatizing banks to foreign owners as a credible commitment to no further government bailout.In 1999, the Chinese authorities established four AMCs as temporary institutions to deal with bad loans originated before 1996 that totaled 19% of 1999 GDP. AMCs are charged with both the disposal of assets and the restructuring of SOEs, with the latter facilitated by debt-equity swaps approved by State Economic and Trade Commission (SETC). They are responsible to three government agencies; in addition to the SETC, these are the Ministry of Finance and the People’s Bank of China, the central bank. Thecombination of the direct relationship between an AMC and its parent bank and this shared oversight leaves several unresolved issues. First, AMCs are set up as SOEs so that their governance is beset with traditional problems. Second, AMCs are expected to engage in a broad range of financial activities without the requisite human capital. Third, the incestuous relationship with the parent bank that retains the SOE client makes the flow problem paramount. Fourth, the difficulty of committing credibly to a once-off policy may lead to further default and a serious moral hazard problem.We offer a modest proposal that transforms the AMCs from temporary institutions to continuing players in China’s financial sector and addresses these incentive problems. Since the recognition of bad loans is a dynamic process, we recommend that the entire client relationship, not just the bad assets, be transferred from the parent bank to the AMC. Each of the four large banks will decide which SOEs it wishes to retain as client as which it prefers to transfer to its AMC. This establishes the SOB’s full responsibility for the SOEs that it keeps as clients. It also provides the AMC with leverage over the clients whose loans it has inherited since these SOEs will depend on the AMC for their banking needs. In addition to downsizing somewhat the SOBs, this proposal allows the AMCs to develop into viable financial institutions that will compete eventually for commercial business. The skills learned by the staff in working with weak clients in restructuring debts will be useful in future banking activities. Our proposal supports the development and competitiveness of China’s banking sector by establishing new domestic financial institutions akin to venture capitalists or investment banks.1. IntroductionChina was the only major economy in East Asia that not only avoided the recent financial crises but also continued to exhibit strong growth. This was attributable mainly to the strengths of the Chinese economy, including the current account surpluses, the dominance of foreign direct investment in capital inflows, the size of foreign exchange reserves and the control of capital account (Huang and Yang 1998). China was fortunate to have controls over the capital account in place when the East Asian financial crises began (Fernald and Babeson 1999). The insulation of the domestic capital market helped to prevent a fatal international attack due to uncertainties of capital flows. However, strong evidence of the fragility of China’s banking sector can be found in Bonin (1999), Bonin, Cheng, and Jaffee (1999), Cheng, (1999), and Lardy (1998). Furthermore, gradual liberalization of China’s capital account is inevitable with its accession into the WTO.1 If financial risk is not eliminated quickly, the probability of a banking crisis will increase. Such a crisis would not only lower the living standards of the Chinese people but also eliminate many of the achievements of economic reform overnight. International experience suggests that cleaning up banking problems is costly, often accounting for 10 to 20 per cent of GDP (Goldstein and Turner 1996; Dziobek and Pazarvasioglu 1997). Existing estimates indicate that the costs for China would be at the upper end of this range, at best.2 Resolving the bad loan problem is crucial to sustaining growth and continuing reform as the ratio of bank loans to GDP stands at more than 120%.3 In any banking system, the bad loans problem consist of a stock component, old debt that is not performing, and a flow component, new lending that may become non-performing. The two components are linked by the normal client relationship in bankingand, in some countries, by the government’s encouraging or even directing state-owned banks to lend to unprofitable state-owned enterprises (SOEs).4 New lending to a client with non-performing old debt is likely to become a bad loan. Government-encouraged loans to SOEs that are chronic loss-makers are likely to be non-performing. Both aspects must be considered in designing policy for bad loans in China.The Chinese government has taken a series of measures designed to build a strong banking system including: recapitalization of the state-owned banks (SOBs), adoption of the international standard accounting system, establishment of four asset management companies (AMCs) and introduction of debt-equity swaps as an instrument for dealing with bad debt. The exact policy procedures for dealing with the bad loans are still unfolding, as the transfer of the non-performing loans (NPLs) to the AMCs was completed only recently. Hence, many questions remain to be answered and some opportunities to modify policy remain. Is the current institutional set up of the AMCs efficient? Will the AMCs be able to work out the NPLs as expected? Will asset sale and debt for equity swaps prove feasible? How will the government prevent moral hazard problems from affecting all parties: the enterprises, the banks and the AMCs?This paper analyzes the bad loan problem of the Chinese banks with an ultimate goal of providing some answers to these questions. The next section explains why financial fragility developed rapidly during the reform period and assesses the seriousness of the bad loan problem. Section 3 discusses the experiences of the Resolution Trust Corporation (RTC) in the United States and bank restructuring policies in three Central European transitional economies with an eye to drawing lessons for the Chinese AMCs. Section 4 characterizes the institutional arrangements for the AMCs and identifies someremaining problems. Section 5 presents a suggestion for modifying the current AMC program. Section 6 concludes with a consideration of the impact of complementary reforms on bank policy.2.Growing Financial FragilityFinancial fragility emerged during the reform period as a result of the evolving triangular relationship among the SOEs, the SOBs and the fiscal system (Huang and Yang 1998). The reform of SOEs was aimed at transforming them into financially viable, independent economic units. To expand enterprises’ autonomy and incentives and to strengthen their responsibilities, the government experimented with the responsibility system, the contract system and the share-holding system (Huang et al 1999). To increase further the enterprises’ independence, financial relations between the SOEs and the state were redefined through the loans for grants and the tax for profit reforms during the first half of the 1980s. Bank loans replaced free budget grant allocations as the key source of SOEs’ capital and tax payments replaced profit remittances as sources of fiscal finance.The objective of the SOB reform was to build a well functioning two-tier bank system with the central bank responsible for financial supervision and monetary policy and the commercial banks responsible for the allocation of capital. Currently, the four major SOBs account for about 70 per cent of domestic credit and hold over 70 per cent of household deposits (Lardy 1998). Rounding out the financial sector are rural consumer cooperatives holding about 10% of domestic credits and 20% of household deposits and urban commercial cooperatives with about 5% of each. As a group, trust and investment companies (TICs), which are not allowed to take household deposits, had held anappreciable share of domestic credit, around 6%, until recent bankruptcies lowered their market share. No other bank, or group of banks, currently holds any appreciable market share in domestic credits or household deposits although new private banking licenses are increasing. The four large SOBs are to remain under state ownership for the foreseeable future; they are large by international standards when assets are used to measure size. At the end of 1996, the largest, the Industrial and Commercial Bank of China (ICBC), was ranked fifth and all four were among the top fifty of all banks in the world.5 Hence, the big four SOBs dominate a banking sector that is itself the dominant part of the financial sector in China.The Commercial Bank Law, promulgated in 1995, separated commercial banking and investment banking and set prudential ratios for bank portfolios. The law made banks responsible for their profits and losses but also mandated that they conduct lending according to the needs of the national economy and social development following the direction of the state’s industrial policy. The latter directive is often in conflict with the former and indicates that SOBs are not independent from policy lending. Hence, SOBs can not be expected to bear full responsibility for their lending decision. The goal of fiscal reform was for the state to withdraw gradually from direct allocation of capital and to concentrate on supplying public goods. From the mid-1980s, the fiscal system was decentralized to give more incentives to the local governments. In 1994, a new scheme was introduced to specify clearly the division of local-central tax revenues (Brean 1998).These reforms had clear, but sometimes contradictory, objectives and were implemented gradually and often incompletely. This led to important drawbacks and eventually gave rise to financial fragility. The debt-equity ratio of the SOEs rosedramatically from 23 per cent in 1980 to 440 per cent in 1998, following the loan for grant reform. The enterprise reforms succeeded in expanding autonomy and providing incentives but failed to establish a governance system for monitoring and enforcing responsibility. Loss-making SOEs were rarely liquidated and redundant workers were not usually dismissed until very recently. Between 1980 and 1994, enterprise expenditures on social welfare increased by six times and, in the mid-1990s, it was roughly half of the SOEs’ total wage bill (Huang et al 1999). Consequently, the profitability of SOEs fell sharply and, from 1996, the consolidated state sector became a net loss-maker. As a result, SOBs were often forced to extend new loans to illiquid SOEs.The financial deficits of the SOEs had direct fiscal implications. The revenue capacity of the fiscal system declined significantly during the reform period. The share of fiscal revenues to GDP decreased from above 30 per cent in the early 1980s to 12 per cent in the late 1990s (Brean 1998). However, the government could not refrain from intervening in enterprise activities, especially from subsidizing loss-making SOEs.6 In doing so, the government sought financial resources from the commercial banks in the form of policy loans, which accounted for about 35 to 40 per cent of total bank loans in the 1990s (Institute of Economics 1998). Projects financed by policy loans usually have high default rates. Bank loans to GDP increased from 50% in the late 1970s to 120% in the late 1990s. Clearly, a shift from fiscal financing to bank lending, or quasi-fiscal financing, occurred during this period and the government incurred contingent liabilities for some of the assets on the SOBs’ balance sheets.These institutional weaknesses had adverse impacts on the health of the banking system. The profitability of the SOBs banks declined consistently in the 1990s. Ifuncollected interest payments are excluded from the revenue side of the financial accounts, most SOBs, except the Bank of China, would report financial losses by 1996 and in the following years (Li 1998). At that time, the average capital-adequacy ratio was only 4.4 per cent, which was lower than in 1994 and much lower than that required by China’s Commercial Bank Law (Lardy 1998). In 1998, the Chinese government recapitalized the banks to raise their capital-adequacy ratio to above 8 per cent. However, since uncollectable loans are not accounted for properly, capital adequacy ratios are not very meaningful.Discussions of China’s banking problems concentrate on NPLs, although the exact quantification of these is difficult. Chinese authorities do not release official data for confidence reasons. Prior to 1998, Chinese banks used a loan classification system based on actual loan performance that divided NPLs into three types: overdue, doubtful and bad.7 This approach underestimated NPLs, as it did not include highly risky loans that were still paying interests and were not yet overdue.8 The central bank once dictated that SOBs could classify no more than 5 per cent of all of their loans as overdue, no more than 8 per cent as doubtful and no more than 2 per cent as bad (Lardy 1998). Existing estimations suggest that the proportion of the NPLs was likely to have been about 24 per cent (CCER, 1998, and Li, 1998) before the Asian crisis and about 29 per cent (Fan, 1999, and Li, 1998) after the crisis. Such proportions are very high even compared with NPLs in the crisis-affected East Asian economies.9These estimates are supported by SOE survey data found in Yuan (1999) that report non-performing debts owed by the SOEs. In 1995, the proportion of non-performing debts in Yuan’s samples ranged from 19% in Jiangsu province to almost 43%in Jiln province with ratios for Sichuan and Hunan provinces around 31%.10 Bad debts, themselves, were 6 per cent of total debt in 1995, which is similar to the estimate by CCER (1998) for the whole banking sector in 1997. Obviously, the state budget will have to bear most of the cost of bank restructuring and this has important macroeconomic implications. China is regarded as a low debt burden country, with a debt to GDP ratio of 25 per cent, of which about 10 per cent is domestic debt and 15 per cent is external debt. This ratio is significantly lower than the internationally acceptable level for sustainability of 60 per cent (Fan 1999). However, given the low and declining revenue capacity of the fiscal system, the feasibility of accumulating further debt may not be as attractive as the low ratio suggests. More importantly, if unrecoverable bank loans were included, total debt would already account for more than 45 per cent of GDP.3.International Experiences with Bad-Debt WorkoutKlingebiel (1999) considers the experiences of several countries in setting up centralized asset management companies both to deal with NPLs and to resolve solvency problems of distressed financial institutions. Two types of agencies are identified: rapid asset disposition agencies and longer term restructuring agencies. Of the seven cases considered, four are in the former category. Of these, only the U.S. Resolution Trust Company (RTC) has been wound up. The other three are still in existence, although they were designed to be temporary government agencies. In two of these three cases, Mexico and the Philippines, Klingebiel concludes that the asset management agencies hid the extent of the bad loan problem and prolonged the effective resolution of the banking crisis. After a brief review of the successful RTC experience in the U. S., we summarizethe experiences with banking sector reform in three fast-track Central European transition economies. In our opinion, these experiences are more relevant for China than is the U.S. case.3.1. The Resolution Trust Company in the United StatesThe RTC was set up as a rapid asset disposal agency in 1989 to resolve bad loans from the portfolios of failed Savings and Loan Associations (S&Ls).11 As part of a public agency, the RTC had several objectives: to maximize the net revenues from the sale of transferred assets, to minimizing the impact on local real estate markets and financial markets, and to maximize available and affordable housing for low-income individuals. The assets transferred amounted to $465 billion or about 8.5% of total financial sector assets and approximately 8.5% of GDP in 1989. For comparison with China, it is important to note that the RTC acquired both performing and non-performing assets and that the level of NPLs reached only 3% of total banking sector assets at the height of the U.S. crisis. Furthermore, about 50% of the assets were real estate loans and mortgages while 35% were cash and other securities. Hence, many of the transferred assets were either good or could be sold quickly through bundling, securitization, and auctions in the deepest capital market in the world.The RTC was set up as a temporary federal agency intended to operate until 1996 only; it completed its work in 1995 so that the sunset clause was honored. The majority of the senior personnel at the RTC came from the Federal Deposit Insurance Company and, consequently, its staff had experience with the resolution of failed financial institutions. Nonetheless, the RTC relied on private sector contractors to evaluate, manage and sell many of the assets. An effective management structure allowed the RTC to collectalmost one-third of the assets transferred reducing significantly the amount to be sold. Although the recovery rate on total assets transferred was 86%, the final cost of the RTC’s operations amounted to $88 billion, which is about 20% of the total value of assets transferred and over 1.5% of 1989 GDP.According to Klingebiel (1999), several unfavorable factors influenced the RTC’s operations. First, sporadic government funding increased resolution costs. Second, rapid asset disposal was hampered by inconsistent multiple objectives. On the other hand, several favorable factors were identified. First, the amount of assets transferred was a relatively small percentage of overall financial assets and many of these were performing at the time. Second, the assets could be bundled and securitized for quick sale in deep capital markets. Third, the RTC was able to contract out the disposal of assets to private sector agents having the necessary skills and expertise. As we shall argue below, China’s situation makes it unlikely that these favorable factors apply; rather China’s reform policy is more likely to fall victim to unfavorable factors.3.2 Bank restructuring in Central EuropeThe experiences of the fast-track Central European (CE) countries, i.e., the Czech Republic, Hungary and Poland, with bank insolvency and bad loans provide a list of more don’ts than do’s.12 Of these three countries, the Czech Republic had a financial structure most resembling that of China with a relatively high ratio of bank loans to GDP and market shares of the big four banks of about 70% for loans and 80% for deposits. Furthermore, at the beginning of the banking reform in 1990 in then Czechoslovakia, all of the working capital of SOEs was funded by short-term, low-interest, revolving bank credit referred to as TOZ loans. A centralized hospital bank, Konsolidacni Banka (KnB),was created for restructuring these loans on commercial terms. All TOZ loans were transferred along with a comparable amount of enterprise deposits from the other banks. However, the SOE clients remained with their parent banks that provided banking services and new loans. In several stages, other loans classified as bad were transferred from the largest Czech banks to KnB for work out and the government recapitalized the parent banks.Although considered appropriate at the time, the Czech solution failed to insure the strength of the domestic banking system. Neither the creation of a separate hospital bank for credit obligations extended on non-market terms nor several rounds of cleaning up the banks’ balance sheets made the big four Czech banks strong financial pillars. What went wrong? Simply put, the foundations for a strong market-oriented banking sector were not put in place. First, the big banks did not achieve independence from the government as the state-retained majority or near majority stakes in them after these banks participated in voucher privatization. Second, the incentive (flow) problem was not solved as the banks not only retained their clients but they became even more involved with some of them as a result of voucher privatization. In the privatization process, banks through their investment funds took ownership stakes in some of their clients so that the potential arose for a conflict of interest between the bank as an equity holder and the bank as a debt holder. When a mini-currency crisis hit, Czech firms became distressed and the banks’ balance sheets suffered. Interestingly, the Czech government’s protectionist policy had allowed domestic banks to maintain high spreads and, hence, earn reasonable profit margins. Even in this environment in which banks could self-capitalize, the bad loans problem was not resolved because soft lendingpractices were continued. The large Czech banks are currently in need of another round of significant recapitalization before they can be sold to foreign investors. Estimates now indicate that the total cost of bank restructuring in the Czech Republic may be about 30% of GDP, making the Czech clean-up the highest cost restructuring program in any transition economy to date.By contrast, Hungary pursued a policy of privatizing state banks by selling controlling shares to strategic foreign investors as rapidly as possible. Such sales required recapitalization of the banks to make the combination of current net worth and franchise value attractive to a foreign investor. Two major and several minor recapitalizations of its domestic banks earned Hungary the dubious distinction as the country most oblivious to moral hazard. The first major recapitalization was insufficient both because the instruments used were not sufficiently liquid or financially attractive and because the recapitalized banks were still servicing bad clients. A second major recapitalization, using market-type instruments, was ultimately successful because it was followed closely by privatization to independent, foreign, owners. This combined recapitalization and privatization strategy left Hungary with the strongest banking sector of all transition countries.The Hungarian experience points to the importance of achieving independent governance both from the state and from undesirable clients. Of more importance than inherited bad loans to the forward-looking operations of the bank are inherited bad clients. The Hungarian bank with the most exposure to loss-making SOEs was Magyar Hitel Bank (MHB). Prior to searching for a strategic foreign investor but after recapitalization, MHB’s loan portfolio was divided into good and bad assets. The badloans along with these clients’ deposits were separated from the good part of MHB and a department was set up to work with these clients in an attempt to recover some portion of the bad loans. Only the good bank was privatized; this transaction attracted a strategic foreign investor who increased subsequently the bank’s capital.The Polish experience indicates the inappropriateness of making banks responsible for enterprise restructuring. The World Bank supported a program of bank-led enterprise restructuring based on the notion that the major bank creditor had sufficient information about their clients either to promote restructuring or to decide to liquidate large SOEs. Financial restructuring dominated bankruptcy as the preferred option (Gray and Holle, 1996). The main instrument used to restructure loans was the debt-equity swap; this option was chosen disproportionately by the weaker banks. Hence, weak banks with no expertise in restructuring large companies wound up taking ownership stakes in their weak clients. Furthermore, new bank credit was provided to ailing enterprises in about a third of the cases surveyed by Gray and Holle (1996). In a case study of one Polish bank, Bonin and Leven (2000) find that new credit extended to three large military-industrial clients in the program exceeded the total amount of bank recapitalization and left the bank with more, rather than less, exposure to these clients after financial restructuring. As in the Czech Republic, Poland’s program strengthened, rather than severed, the ties between banks and their undesirable clients. Hence, the Polish program provided breathing room for weak SOEs to postpone painful restructuring and, in doing so, it underscored the importance of banks divesting themselves of their non-viable clients.。