U.S. media said China’s debt risk is exaggerated but need to guard against Japanese style recession -www.kepu.net.cn

U.S. media said the Chinese debt risk is exaggerated but the need to guard against the Japanese recession – Sohu News Reference News Network reported on September 11th U.S. media said, in recent years China is the largest in the history of the lending frenzy. In 2015, its total debt amounted to $26 trillion and 600 billion, about 5 times as high as it was 10 years ago, more than 2.5 times the country’s economy. This huge growth prompted the famous investor Soros to compare China with the United States before the 2008 financial crisis. According to voice of America radio website reported on September 8th, the traditional view is that the rapid growth of debt will eventually lead to economic crisis. It may occur in several ways. In Greece, the culprit is the government, which has accumulated more debt than it can bear. In the United States, risks lurk in banking and household finance. Reported that in China, the problem is mainly in the company. China’s biggest companies — especially those state-owned enterprises — are the main players. Higher debt means that companies will have to invest more in interest payments and repayment, and invest less in investment and employment. This could lead to a vicious cycle. Reducing spending on investment and employment will hit the economy as a whole, damage the profitability of the business and make it harder to pay off debt. Bad loans will rise, bank lending will be frozen and confidence in the financial system will falter, triggering a full-blown banking crisis. China is the world’s second largest economy after the United States, and plays an important role in promoting global economic growth. If this happens in China, the impact could spread around the world. China debt is about the internal pocket and on the other hand, many economists believe that Chinese debt does not pile up like a mountain hand looks so terrible. Qu Hongbin, chief economist for Greater China, HSBC (HSBC), and his team said that China’s debt is simply the consequence of the country’s financial system. For various reasons, Chinese companies and households save more money than other countries, businesses and households. These funds converge in the bank, turned into a loan, resulting in high debt levels in china. Qu Hongbin said that these debts have to support the savings, so the risk is not so great. "Concerns about the level of debt in China have reached a critical point, which could trigger systemic risks are exaggerated," the team wrote in April. Others claim that China’s debt is largely endorsed by the government, and therefore does not pose a threat. Many of the loans come from state-owned banks, which are major creditors of large state-owned enterprises in china. This means that Beijing can prevent the bank to the borrower a push, and is likely to provide support for the financial system, to prevent the occurrence of free market economies more likely to encounter the crisis. Reported that the debt is debt, making Chinese unlikely because of overseas problems and crisis control. Economists worry that China is plunged into a Japanese style recession, but there is plenty of evidence that the rapid expansion of debt is almost always disastrous. Some economists say China has escaped even a full.相关的主题文章: