Big Four recapitalization (1998)
China issued 270 billion yuan in special treasury bonds to inject capital into the four largest state banks, which carried non-performing loan ratios well above 20%. The cleanup preceded banking reform and the banks' eventual stock listings.
The banks' balance sheets were cleared and they could resume normal lending.
The cleanup enabled partial privatization through IPOs and a decade of rapid credit expansion.
The same tool — special-bond-funded state capital — is now being applied to policy lenders and insurers in a weaker economy.
