China should let in distressed investors, says academic

China could nip the budding problem of dud loans resulting from its 2009 fiscal-stimulus package by securitising assets and allowing them to be sold at distressed levels, says Victor Shih, a political scientist at Northwestern University in Chicago. A native Hongkonger, Shih has spent the past two years studying the mainland's policy response to the global financial crisis. To finance $4 trillion worth of infrastructure projects, the authorities instructed banks to make loans to hund…