Analysis and Prediction of the Causes of Non-Performing Loans: A Case Study of China

Abstract

This paper conducts a case study of China to analyze and predict the causes of non-performing loans. Firstly, by defining and classifying non-performing loans, the paper analyzes the causes of non-performing loans, including the macroeconomic environment, internal bank management, and market competition. Secondly, using the time series analysis method, the paper predicts the non-performing loan ratio of China from 2020 to 2021. The results show that the time series regression model can predict the non-performing loan ratio well. Finally, based on the causes of non-performing loans and the prediction results, the paper proposes corresponding suggestions, including strengthening macroeconomic regulation and improving internal bank management. The paper also analyzes the shortcomings and limitations of the prediction method and provides prospects for the future. This paper has particular reference value for the causes and prediction of non-performing loans and can provide some reference for relevant departments and financial institutions.