Beware The Chinese Debt Dragon

Posted | 21/10/2016 / Views | 3794
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People often talk about eating Chinese and being hungry half an hour later.  China just miraculously met market expectations for GDP growth in the last quarter at 6.7% annualised.  The markets gave a collective sigh of relief on Wednesday as the much feared ‘hard landing’ appears to be avoided.  But in a common theme in global economics at the moment, that annualised 6.7% GDP growth came courtesy of 20% debt growth over the same period.  So it took $3 of debt to get $1 of GDP growth.  Did you hear that on the news Wednesday??  Didn’t think so…  In September alone China added, wait for it…$330 billion (a third of a Trillion) in debt.  Check out this graph:


Beware The Chinese Debt Dragon


Beware The Chinese Debt Dragon