For Nicholas Vardy, the answer is yes. He says: "Chinese megabanks aren't even banks -- at least not the way we understand them. Carved out of the old Communist banking system just over 10 years ago, the state-owned banks' role has been to bankroll the government's massive infrastructure projects and to keep otherwise bankrupt state-owned enterprises [SOEs] afloat. As arms of the Communist government, Chinese banks have had no incentive to learn the disciplines of basic banking. Conversely, loan applicants never had to cobble together a business plan to get a loan -- or suffer the negative consequences of failure.
That's why it's no surprise that Chinese state-owned banks are a commercial disaster. The Chinese government has pumped over $434 billion to bail them out -- just since 1998. That's more than the GDP of banking giant Switzerland. The U.S. Savings & Loan scandal of the early 1990s cost to the U.S government barely registers in comparison. Add to that the estimated $358 billion in bad loans that China's four-largest banks officially have on their books today, and something smells rotten in Shanghai".
Read the rest of his article here.