Quick Take: China promises to give up its debt addiction…again

Last week’s article by an ‘authoritative person’ published in the People’s Daily lambasting poor management of the Chinese economy, mentioned the evils of ‘leverage’ 18 times and going so far as to warn China’s debt-fueled growth could lead to an economic catastrophe.

A day later, the state media went big with a speech by President Xi Jinping reiterating the need to implement the government’s “supply-side” reform and transform the economy. Commendable words which put China somewhere around step five in the 12 steps of Alcoholic Anonymous, admitting “to ourselves, and to another human being the exact nature of our wrongs”.

But there were promises of reform when the new administration came to power three years ago, since which China has staged a major relapse, with total debt now at debt spiral to 247% of GDP, according to Bloomberg Intelligence estimates.

This week, Bloomberg also reported that Chinese borrowing in April included 1 trillion yuan ($153 billion) of regional government notes. It would appear to be very difficult for the Chinese economy to forego the credit binges which deliver ever-declining economic boosts.


Go to Source
Author:

Free Book: Doing Business in China - Tips and Tracks

China has its own business culture and etiquette.
There are many things that a businessman from West needs to understand if he wants to enter the China market and succeed.

Check Email To Downoad the book

Something went wrong.

You might also like More from author

Comments

Loading...
Hide me
Free Giveaway Book: Doing Business in China – Tips and Tracks
Subscribe to download - Doing Business in China – Tips and Tracks
Show me
Build an optin email list in WordPress [Free Software]

Send this to friend