A British journalist who lived and worked in Hong Kong and Beijing from 1991 to 2000 predicts a serious financial crisis in China, in the form of a bank run, over the next four to six years.
'My own feeling is that we can't probably have the entirely happy ending that we would like to have, as there will be some form of financial crisis in the course of the next four, five, six years and it will be pretty serious,' journalist Joe Studwell told the Hong Kong General Chamber of Commerce yesterday.
'You can already see the central bank is phenomenally nervous about the possibility because you do get little localised bank runs from time to time.'
But every time there had been a bank run to date, the Chinese banks had given all retail depositors their money back because the banks did not want the word to spread that there were any possible risks in depositing their money.
Despite his dire prediction, Mr Studwell said he was not pessimistic about China overall.
He said many multinational corporations such as McDonnell Douglas and General Motors which had entered the Chinese market had failed because they did not understand the local market and listened too much to their consultants' strategy.
