Is China’s Economy in a Financial Crisis?

According to Benchmark Reporter, China has averted a crisis as far as their stock markets are concerned with some heavy-handed intervention. However, their corporate debt has already reached $16.1 trillion and is still rising.

Their corporate debt is currently at 160% of their GDP and that is twice as much as the US.

Benchmark Reporter predicts that this debt mountain is going to climb an additional 77% to $28.8 trillion in the next 5 years.

The debts of manufacturers is continuing to dwarf their profits. In 2010, debts of material companies was at 2.8 times of their core profit. At the end of 2014, this figure was 5.3 times.

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One thought on “Is China’s Economy in a Financial Crisis?

  1. Eventually they will probably have a shakeout, like in South Korea at the turn of the century, some people will suffer financially. However the country will be left with industries and infrastructure with which to continue growing. The fact is you have to speculate to accumulate, which in this case means investing heavily upfront long before the full profits come through.

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