China's 3 trillion dollar mistake

``It should be abundantly clear that China is heading straight into a banking cycle where NPLs will be increasing to 10 -- 20 per cent (minimum). If we assume around 70 per cent of assets are loans and further assuming they will recover 20 cents on the dollar, total losses will be in the trillions. The massive war chest represented by the FX reserves China bulls always seem to be thumping, as the cure to all ills, will be gone before you can say ghost town.   ''