Nice summary, Greg. One comment Michael Burnap made that I found interesting: quoting Donald Trump, he said that “If you owe a bank $1 million, the bank owns you. If you owe a bank $100 million, you own the bank.” A counter-intuitive truth. Given the size of the US debt to China…and the size of the (still) relatively wealthy US market, it’s clearly in China’s interests to help the US avoid collapse. I have had so many conversations related to this over the last two weeks, with people expressing a wide range of viewpoints. Anyone else have any thoughts on this?

Slides from the presentation are available on Blackboard.

If you want to do business in China as a foreign entity the major state owned banks are the safest bet, especially if doing business in a larger city.

Opening an account in China is more paper intensive. You’ll have to be able to verify who you are and your business purpose in the country. Getting a loan is more difficult. China does not have a mechanism like the UCC to give everyone the same standards. They are putting commercial laws in place and Mr. Burnap foresees the laws to continue to change in the next few years.

Be wary of Chinese business partners offering guarantees. Make sure the guarantee is coming from the state or a reputable bank. Otherwise it may not be honored.

Impact of US Credit Crisis on Chinese banks – Chinese banks did not hold a lot of the collateralized securities or the sub-prime loans, so they likely will not be largely impacted by the credit crisis.

There is likely more exposure to Chinese banks that have loaned to Chinese exporters. Thus far the impact has been mitigated by the strong exports to the Middle East.

There is no formal system to identify credit risk in China. There is no reporting system to help validate a person’s identity, although they are working on it. It is very tough for small and medium sized companies to get lines of credit in China. These lines of credit are the life blood for these companies.