China’s total debt rose to a record 237 per cent of gross domestic product in the first quarter, far above emerging-market counterparts, raising the risk of a financial crisis or a prolonged slowdown in growth, economists warn.
Two scenarios are possible for China:
1) a “Lehman moment” reminiscent of the US in 2008, when banks failed and paralysed credit markets
2) a chronic, Japan-style malaise in which growth slows for years or even decades
I personally believe in 2). Option 1) will be avoided by printing money by Bank of China.
China debt load reaches record high as risk to economy mounts
http://www.ft.com/intl/cms/s/0/acd3f2fc-084a-11e6-876d-b823056b209b.html#axzz46jQxyCA3
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