China’s banks posted strong third-quarter profit growth, despite investor concerns that these banks may face a wave of non-performing loans. Industrial and Commercial Bank of China (ICBC), China’s largest bank in terms of assets, said net profit rose 28 percent year over year in the third quarter. Bank of Communications saw income rise 31 percent. Bank of China’s third quarter profit rose 9 percent. Agricultural Bank of China’s profits rose 40 percent in the quarter. China Construction Bank’s profit rose 16 percent year over year in the third quarter. Chinese banking shares have been battered this year as investors have questioned the quality of the lenders’ balance sheets. China’s banks went on a lending spree during the financial crisis and some analysts fear that slowing global economic growth could harm China’s economy and result in a fresh wave of nonperforming loans in the banking sector. However few market watchers believe a banking crisis in China would match those in the US or Europe in terms of magnitude.

Food inflation in India rose 11 percent for the week of Oct. 15, a more than six month high, according to data from the Ministry of Commerce and Industry. Food prices in the country have been persistently high for several months, despite government measures to tamp down inflation. India’s central bank on Tuesday raised its key lending rate by 0.25 percentage point. The Reserve Bank of India has raised rates 13 times in 19 months in order to tamp down inflation, which rose 9.72 percent in September. The central bank said that it was unlikely to raise rates again at its regular December meeting and mid-quarter review. By December the central bank expects inflation to have moderated. The central bank cut its forecast for economic growth in the current fiscal year to 7.6 percent from 8 percent. India’s fiscal year runs through March.

South Korea recorded its 19th month of current account surpluses in September, according to the country’s central bank. The current account surplus, the broadest measure of the country’s trade with the world, rose to USD3.1 billion in September compared with USD292.6 million in August. The surplus was supported by strong exports of cars, steel and oil products, the central bank said. The country’s current account surplus for the first nine months of the year stands at USD15.27 billion, close to the central bank’s forecast for the full-year surplus.

Senior advisors to the Chinese government told the Financial Times that China is likely to contribute to the erozone’s bail-out fund, though with strict conditions. Sources told the paper that the Chinese may consider contributing between USD50 billion to USD100 billion to the European Financial Stability Facility (EFSF) or a new fund set up by the International Monetary Fund. The head of the EFSF arrived in Beijing on Thursday to discuss China’s contribution and French President Nicolas Sarkozy spoke with China’s President Hu Jintao about a rescue plan for Europe.  However, analysts told the paper that China would require contributions from other nations and strong guarantees about the safety of its investments. In return for its contribution, China may ask European leaders to cease criticizing the country’s currency policy.  China may also ask that part of its contribution be denominated in renminbi, which would protect their investment against currency fluctuations.