Beijing Bank Bailout May Help Farmers

With economic growth slowing, China must boost demand in the countryside. That starts with a government rescue for the Agricultural Bank of China
A peasant farmer works near woven baskets full of bok choy on a farm on October 12, 2008 in Wuhan of Hubei Province, China. Photos/Getty Images

Among China's many troubled banks, the Agricultural Bank of China (ABC) has long given Chinese officials the biggest headaches. Established in 1979 to provide financial services to peasants, the Beijing-based bank has accumulated more bad loans—$120 billion at the end of 2007—than any other Chinese state-owned bank. For years, Chinese policymakers have debated proposals to reform the state-owned bank and turn it into a publicly listed commercial bank, but they haven't taken any action.

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