Goldman Sachs recently downgraded several major Chinese banks, including Agricultural Bank of China, Industrial and Commercial Bank of China, and Industrial Bank, causing a significant drop in Chinese banking stocks. The downgrade was based on the assessment that Chinese banks are unable to maintain a favorable balance of provisions, capital, and dividends while facing squeezed earnings. In response, the National Administration of Financial Regulation has communicated with these banks, urging appropriate actions. Chinese state-backed Securities Times criticized the downgrade as being rooted in pessimistic assumptions.
