Friday, 15 January 2016
Concerns about the Chinese debt level
Borrowing has fuelled some of the Chinese economic growth; however, at the same time, the total debt has reached $23 trillion, which is 231% of the Chinese total GDP. This is a dangerous level, and the cutting of interest rates and the required reserve ratio could increase the Chinese debt further. Debt is like an unstable nuclear reactor. It could create energy for the economy to grow faster; however, it can explode and damage the economy, Greece has set a bad example. I think that the Chinese economy experienced a period of fast economic growth but meanwhile many problems have accumulated and hidden in the economy. Instead of seeking an economic growth, I think that the priority for China from economics respect is to solve the debt problem and restructure its economy.
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