China's Superbank (Bloomberg) - Hardcover

by Henry Sanderson (Author), Michael Forsythe (Author)

Inside the engine-room of China's economic growth--the China Development Bank

Anyone wanting a primer on the secret of China's economic success need look no further than China Development Bank (CDB)--which has displaced the World Bank as the world's biggest development bank, lending billions to countries around the globe to further Chinese policy goals. In China's Superbank, Bloomberg authors Michael Forsythe and Henry Sanderson outline how the bank is at the center of China's domestic economic growth and how it is helping to expand China's influence in strategically important overseas markets.

100 percent owned by the Chinese government, the CDB holds the key to understanding the inner workings of China's state-led economic development model, and its most glaring flaws. The bank is at the center of the country's efforts to build a world-class network of highways, railroads, and power grids, pioneering a lending scheme to local governments that threatens to spawn trillions of yuan in bad loans. It is doling out credit lines by the billions to Chinese solar and wind power makers, threatening to bury global competitors with a flood of cheap products. Another $45 billion in credit has been given to the country's two biggest telecom equipment makers who are using the money to win contracts around the globe, helping fulfill the goal of China's leaders for its leading companies to "go global."

Bringing the story of China Development Bank to life by crisscrossing China to investigate the quality of its loans, China's Superbank travels the globe, from Africa, where its China-Africa fund is displacing Western lenders in a battle for influence, to the oil fields of Venezuela.

• Offers a fascinating insight into the China Development Bank (CDB), the driver of China's rapid economic development
• Travels the globe to show how the CDB is helping Chinese businesses "go global"
• Written by two respected reporters at Bloomberg News

As China's influence continues to grow around the world, many people are asking how far it will extend. China's Superbank addresses these vital questions, looking at the institution at the heart of this growth.

Front Jacket

China's rise as a global economic superpower, the success of its top companies, and its continuing domestic boom is intricately tied to China Development Bank (CDB). This less-than-transparent institution, which is wholly owned by the Chinese government, has become the financial enabler of this nation's growth and is arguably the most powerful bank in the world.

While development banks have long existed to finance political projects, infrastructure, and other initiatives, nothing comes close to CDB in scope.

In China's Superbank, authors Henry Sanderson and Michael Forsythe--both Bloomberg journalists working in Beijing--combine on-the-scene reporting and interviews from across the world with numbers crunched from Chinese bond prospectuses to put CDB in perspective, and help you understand the economic phenomenon that is China.

Along the way, you'll not only become familiar with the growing accomplishments and influence of CDB, but you'll also gain valuable insights into the darker side of this political-financial institution--one that has never had to answer to anyone apart from its state shareholders. You'll also discover how China's seemingly unstoppable banking system could potentially be saddled with bad debt from trillions of yuan invested in projects with questionable economic value both at home and abroad.

Throughout the book, the authors:

• Explore CDB's hallmark innovation--the system of local government finance--which has transformed China's landscape in just over a decade by pumping trillions of yuan into various domestic projects
• Profile Chen Yuan, the Chairman of CDB since 1998, and discuss how he's been instrumental in reasserting the Communist Party in China's economy, while managing to preserve enough independence from the government to make decent investment decisions and function as a commercially driven institution
• Analyze CDB's China-Africa Development Fund--China's largest private equity fund investing in Africa--and its attempts to stimulate manufacturing in Ethiopia, and CDB's lending to Ghana
• Address CDB's work to secure a steady flow of oil and gas to China through loans-for-energy deals around the world, particularly to Venezuela
• Examine CDB's lines of credit that have helped new Chinese firms in telecom and alternative energy win significant global projects, as well as how the bank is developing a new form of private equity financing through CDB Capital.

As China's influence continues to grow around the world, many people are asking how far it will extend. China's Superbank addresses this vital question, looking at the institution at the heart of its growth.

Back Jacket

Praise for China's Superbank

"The phenomenal economic rise of China and its growing global role have been driven by a unique mix of political and economic actors. China Development Bank has been at the center of much of this growth especially as the principal banker in China's overseas commodity investments. Henry and Michael's timely book, China's Superbank, details for the first time the role that CDB has played under the focused leadership of its Chairman Chen Yuan. This book is essential reading for anyone wanting to understand how China funds its growth but it also raises important questions as to whether CDB's strategy will be sustainable over the long term."
--Fraser Howie, Managing Director, CLSA Singapore and co-author of Red Capitalism

"Combining in-depth knowledge of China with hard-nosed economic analysis and first-rate journalism, Sanderson and Forsythe have written an astonishingly detailed yet lively portrait of China's muscular state capitalism. This important work tells us in concrete terms how China is expanding its influence around the world, not through military force, but through writing checks. This is a must-read for all those who take an interest in China's rising influence in the world--and its increasingly vulnerable financial system."
--Victor Shih, Associate Professor, Northwestern University

"In China's Superbank Henry and Michael shed a much-needed light on the operations and people behind China Development Bank, an apparent policy bank that in a brief decade has in many ways surpassed the power and functions of the country's Ministry of Finance. The tale of how this formerly moribund institution ignited China's local debt crisis while financing China's foreign policy initiatives is a must for anyone seeking to understand China's opaque financial system."
--Carl Walter, former COO of JP Morgan China, independent consultant andco-author of Red Capitalism

"American Cabinet members say the global reach and growth of China Development Bank keeps them up at night. After reading this book, they might not go to sleep at all. For all the tsunami of news about China's rise in recent years, the country's political and financial institutions remain vastly undereported and little understood. Mike Forsythe and Henry Sanderson's book helps correct that with remarkable detail and insights about the bank that laid the financial foundations for China's economic miracle at home, before then finding a formula to spread its money abroad."
--Richard McGregor, Financial Times reporter and author of The Party

Author Biography

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).