When the four large state-owned banks in China began to establish units to hold their non performing loans in 1999, the new asset management agencies’ mandate was to try to sell or collect on as many of these troubled assets as they could. They themselves were given a ten-year life and then expected to quietly close up shop.

These units were meant to be a footnote, testimony to a time when the banks, including China Construction Bank, ICBC, Bank of China and Agricultural Bank of China, were arms of the state who served the state by making loans at the behest of the state and if those loans went wrong, that was the responsibility of the state rather than the banks themselves.

That may have been the original plan but it hasn’t exactly worked out that way.