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China Bad Loans to Increase, China Orient Asset Says

Chinese commercial banks may see an increase in non-performing loans from this quarter through the first half of next year, China Orient Asset Management Corp. said, citing a survey conducted.

Bad debt may rise as much as 10 percent this year, taking the ratio of non-performing loans to 1 percent to 2 percent of the total by the end of 2012, China Orient said yesterday, citing a survey of commercial banks, asset management firms, investors and intermediaries done in June. The pace at which bad loans increase may accelerate if concerns about a rebound in inflation leads China to tighten monetary policy, said the company, which buys, manages and disposes of bad debt.