English: Cloze Test for Upcoming Exams – Set 141

Directions: In the passage given below there are 10 blanks. Every blank has four alternative words given in options (A),(B),(C), and (D). You have to tell which word is APPROPRIATE according to the context. If all are appropriate then mark your answer as “E”.

GUO SHUQING, China’s new banking regulator, knows the ___1___ of his task. China’s banking system, he observed last month, is worth more than $33trn. So it is bigger than any other country’s, and even than Europe’s as a whole. And he is well aware of the ___2___ left by a decade of breakneck lending growth. But if Mr Guo is nervous, he is hiding it. “All problems and contradictions will be resolved,” he says.
Of course, a Chinese official can be expected to express confidence about Chinese banks. More surprising is that a small but growing number of analysts and investors seem to ___3___. Chinese bank shares are up by a quarter since early last year. One investment bank, Morgan Stanley, has declared that China’s lenders are “in a sweet spot”. Another, Goldman Sachs, has upgraded China to “overweight”—that is, recommending that clients buy Chinese shares—and is especially positive about the banks. Shanghai Financial News, a local newspaper, described the new mood around these giant institutions as the “return of the king”. The question is whether it will be a long, stable reign or a short-lived, ___4___one.
The clearest positive for China’s banks has been an ___5___in nominal economic growth. Real GDP growth (ie, accounting for inflation) is likely to be little changed in 2017 from last year’s 6.7%. But nominal growth is nearly 10% in yuan terms, up markedly over the past 12 months. Higher prices have led to stronger corporate revenues, particularly for indebted steel-producers and coalminers. This, in turn, has made it easier for them to repay loans. Chinese banks’ official bad-debt ratio, climbing since 2012, held steady last year at about 1.7%. Many analysts still think the real level of toxic loans is many times that (some estimate the ratio is as high as 19%), but the ___6___ has clearly slowed.
Meanwhile, banks have started to ___7___ their balance-sheets. In part, this has been through more ___8___ of problem loans. Banks took losses on more than 500bn yuan ($75bn) of loans last year, a record, scrubbing them from their books and selling some to investors. With more credit going to infrastructure projects and to mortgages, which traditionally have been safe in China, loan portfolios are looking healthier. Richard Xu of Morgan Stanley ___9___ that high-risk credit will decline from about 6% of total credit in China today to less than 3% by 2020.
There are also signs that China’s ___10___ state-owned banks are getting a little more efficient as they respond to competition from fintech companies. The four biggest banks, which account for nearly two-fifths of the industry’s assets, cut employees in 2016 for the first time in six years. Banks have been rolling out mobile apps to handle payment and investment transactions that used to be conducted in person. Overall costs of listed banks rose by just 0.6% last year, even as assets grew by 12%.

  1. triviality
    All are Correct
    Option B


  2. meshes
    All are Correct
    Option D


  3. concur
    All are Correct
    Option A


  4. manageable
    All are Correct
    Option C


  5. upsurge
    All are Correct
    Option E


  6. execrable
    All are Correct
    Option D


  7. clean up
    All are Correct
    Option A


  8. dictates
    All are Correct
    Option B


  9. contemplates
    All are Correct
    Option C


  10. shriveled
    All are Correct
    Option C


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