China’s asset management companies (AMCS) were created in 1999 in order to remove non-performing loans from banks’ balance sheets and combat a potential financial crisis due to mounting bad loans. The national-level AMCs include Cinda, Huarong, Great Wall, and China Orient, two of which recently released their 2018 annual reports. These reports underscore the fact that AMCs are not entirely separate from banks, but are closely tied to banks, which could present a major weakness in a serious financial downturn.
First, a bit of background. AMCs were set up to purchase non-perfomring loans