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China's debt mountain is casting a shadow over the world's second-largest economy. Total debt has reached 282 percent of GDP, according to the McKinsey Global Institute. While other big economies aren't far behind, it's the pace of China's credit expansion that's worrying policy makers, spurring targeted stimulus strikes while trying to avoid a debt sugar hit.
Here's how the debt breaks down, according to McKinsey:
Central government debt is low by global standards, giving room for fiscal stimulus if the economic downturn deepens. Local authorities are in a more delicate position, having borrowed heavily via vehicles after the global financial crisis and now grappling with repayments.
More from Bloomberg.com: How A Ragtag Group Of Lefties Mainlined Debt-Free College Into The Democratic Primary
While bank debt doesn't flash red alert yet, rising bad loans signal more pain to come. For non-financials, especially real estate developers, the burden is greater, raising question marks over whether monetary policy loosening will spur a pickup in loan demand among already tapped out corporates. Last month, Baoding Tianwei Group, a power-equipment maker became China’s first state-owned enterprise to default on domestic debt.
You can live your entire life without ever seeing so much as s speck of gold.
originally posted by: intrptr
originally posted by: DJW001
a reply to: intrptr
Correct. Its value lies entirely in its application. A lump of gold is worthless, unless you use it as a paperweight or door stop.
So, it has value or not? Make up your mind.
All China is doing is hinting that it intends to replace the American Empire with the Chinese Empire. If you think the American Empire is bad, just wait till you experience the Chinese Empire.
China's third interest rate cut in six months has spurred concerns the mainland's economic slowdown is hitting where it hurts: the labor market.
"The PBOC move validates investors' assumption that sub-par economic performance will be tolerated by the government only up to a point where it does not pose a serious threat to employment," Uwe Parpart, head of research and chief strategist at Reorient Group, wrote in a note on Sunday. "That point may well have been reached."
The People's Bank of China (PBOC) reduced both the benchmark lending and deposit rate by 25 basis points to 5.1 percent and 2.25 percent, respectively, in response to weaker-than-expected economic activity data, which has raised concerns that the government's annual gross domestic growth (GDP) target of "around 7 percent" could be at risk.
Maintaining stable employment has been a top priority for the Chinese government as it steers the world's second largest economy away from an export-driven model to one based on consumption.