Interesting that you feel the need to start your refutation with nothing more than "smells bad." To me that reads like you don't even believe your own envelope arithmetic enough to not throw in some superfluous rhetorical support.
Huh? The post claims non-performing loans are some sort of poison pill for Chinese economic and political stability. The point of the back-of-the-envelope calculation is to show this isn't the case using some simple math. The blogger could easily have run those numbers himself.
And the reason I said "smells bad" instead of "wrong" is that China is complex and some things that seem wrong on first pass might actually be right. As far as I know, for instance, the blogger is also wrong when he implies that the big four are holding significant amounts of Treasuries on their balance sheets. The reason I believe this is because the People's Bank of China sterilizes currency inflows and monopolizes currency exchange. So the banks which are the most exposed to non-performing SOE debt should not have the USD to invest in US Treasuries and it should mostly be the PBOC which handles Treasury purchases. Googling for terms like "ICBC" and "US Treasury Bonds" suggests this is in fact the case since it doesn't pull up any documents suggesting ICBC is buying Treasuries. But maybe the bank is awash in them and the blogger knows something other people don't? China is strange. It could happen.
> he implies that the big four are holding significant amounts of Treasuries on their balance sheets
What? Where? The only mention of "big four" in his text is about big audit firms being silent about evidence of fraud perpetrated by big Chinese companies.
