China′s Superbank – Debt, Oil and Influence – How China Development Bank is Rewriting the Rules of Finance

HENRY SANDERSON has been a reporter for Bloomberg News since April 2010. Prior to that, he was a reporter for the Associated Press in Beijing and Dow Jones in New York. While at Bloomberg, Sanderson has covered corporate finance, focusing on China's banks, the bond market, and the emergence of the yuan as an international currency. He is a graduate of the University of Leeds (with a BA in Chinese and English literature) and Columbia University (with a Master's in East Asian Studies). MICHAEL FORSYTHE has been a reporter and editor for Bloomberg News since 2000. Prior to that, he was an officer in the U.S. Navy for seven years, serving on ships in the U.S. 7th Fleet. The highlight of his career in Washington was overseeing Bloomberg's coverage of the historic 2008 presidential election. Since returning to Beijing in 2009, Forsythe has focused on policy and politics, with particular emphasis on the international impact of "China Inc." He is a graduate of Georgetown University (with a BA in International Economics) and Harvard University (with a Master's in East Asian Regional Studies).

Preface ix Acknowledgments xix Chapter 1 Let 10,000 Projects Bloom 1 The Wuhu Model 4 The Chongqing Model 9 Global Financial Crisis 12 A Town Called Loudi 15 Li's Story 18 "Manhattan" in China 22 Credit Risk in a One-Party State 26 Cracks in the System 29 Chapter 2 Turning a Zombie Bank into a Global Bank 39 A Life in the Party 41 The Princeling Party: The Beginning of State Capitalism 50 Taking Over a Basket Case 55 Transforming CDB from an ATM Machine 58 Developing a Slogan 62 Beating the Commercial Banks 64 Gao Jian: Creating a Market for "Risk-Free" Bonds 68 The West Self-Destructs: The Financial Crisis 72 Moving Beyond Wall Street 75 Chapter 3 Nothing to Lose but Our Chains: China Development Bank in Africa 85 Made in Ethiopia 90 Ethiopia's Zone: Exporting to the West 94 China-Africa Development Fund: The State's Private Equity Arm 96 Rising Role of China in Africa 101 Fixed Capital: Western-Style Lending 105 African Tiger: Can Ghana Escape the Resource Curse? 108 Fresh Capital 116 Chapter 4 Risk versus Reward: China Development Bank in Venezuela 123 Default in Bolivar's Country 125 China's Venezuelan Adventure 126 Loans for Oil 132 Cars, Housing, and Gold: Good Business for China 136 Ecuador 139 Russia 140 China in the Backyard of the United States 141 Chapter 5 Funding the New Economy 147 Obama's Dream 151 Default-Free Bond Market 153 Financing China's Global Company: Huawei 157 The Final Frontier: Private Equity 163 Acting as a Gatekeeper 167 Imprint of the State 169 Chapter 6 The Future 175 About the Authors 181 Index 183