A major part of China’s current reform efforts involves strengthening the financial system and re-structuring and re-capitalizing, or selling, most of the companies still owned by various levels of government. Estimates of the number of remaining state-owned enterprises (SOEs) varies from 30,000 to 50,000 depending on the percent of state ownership involved. Non-performing loans (NPL) held by the commercial banks in China are estimated to be about 13% of total lending…