The coupling of the financial collapse with China’s lock-up period expiring on many foreign banks’ share purchase of domestic Chinese banks may prove to be the “linch-pin” that brings this cliche house of cards crumbling to the floor. In recent weeks, the Royal Bank of Scotland has opted to sell it’s 4.3% stake in Bank of China for a cool $2.4 billion, profiting nearly $800 million. At the same time, Li Kashing unloaded $500 million in BOC shares, and UBS an additional $800+ million.

The question  is, as business owner and manager in China, “are these simply cash flow moves, or do these bank ‘insiders’ have access to information that the rest of us cannot get our hands on, or are simply too caught up in the China bubble to believe that these banks have a foundation in the swamps of Pudong?”

Varying opnions exist, but there are strong signs that the banks are nothing short of becoming insolvent in the next 12 to 18 months should the Chinese economy faulter and fall below 7.5% GDP growth (2009 est. 9%). Don’t forget who these banks open their biggest lines of credit with, SOE manufactures. These companies are shutting their doors on a daily basis throughout the south and across the northeast due to the glut of orders being placed. These same SOEs are culprits behind the Chinese banking crisises of the past decade, and I believe will be the dagger that will once again bring down the mighty Big Four.

Welcome to the brave new world of Chinese banking.