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The China-US sorpasso is looming. I do not mean the much-exaggerated moment when China’s GDP will overtake America's GDP – which may not happen in the lifetime of anybody reading this blog post – as China slows to more pedestrian growth rates (an objective of premier Li Keqiang.)
The sorpasso may instead be the ominous moment when China’s debt ratios overtake the arch-debtor itself.
I had presumed that this inflection point was still a very long way off, but a new report from Stephen Green at Standard Chartered argues that China’s aggregate debt level has reached 251 per cent of GDP, as of June.
This is up 20 percentage points of GDP since late 2013. The total is much higher than normal estimates, though it tallies with what I have heard privately from officials at the IMF and the BIS.
Mr Green – a highly-respected China veteran – includes total social financing (TSF), offshore cross-border bank borrowing (a story that we are going to hear a lot about), bond issuance, shadow banking of various kinds, and government debt.
The ratio has risen by 100 percentage points of GDP over the last five years.
It is the speed of the rise that worries credit rating agencies and regulators – including many at the Chinese central bank – as much as the volume itself. Though China is scary on both fronts. It has pushed debt to $26 trillion, more than the entire commercial banking systems of the US and Japan combined. The scale obviously has global ramifications.
originally posted by: stuthealien
are you kidding me ,i can buy anything from china and at less then half the price as it costs from the u.s.a,long live china and their more then fair prices,keep your over priced over rated american merchandise im buying chinese all the way,china is my friend and so is ebay,go look you guys are ripping the world and its you in debt ..and china buys your debt so you should bow and say thank you