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Specifically don’t overlook the total amount of debt in China’s non-financial sector, which most know about. China’s non-financial sector went on a debt binge for well over 9+ years which is where the vast majority of the debt is by category in the 260% of debt-to-GDP ratio mentioned in the article posted above.
(Note: 3 categories of debt: Household debt, Government debt, Business sector debt …. and it is non-financial business sector debt when looking at debt-to-GDP which is very high in China.)
NPLs anyone? Any of the following can make it increasingly difficult for businesses in China’s non-financial sector to service their debt: Rising interest rates, slower global economic growth, or slower economic growth in China itself (which by the way the IMF forecast China’s GDP to continue to decline through at minimum y/e 2021).
Speaking of NPLs or NPAs … In India’s banking system “the gross non-performing assets (NPAs) of the 14 PSBs that have reported their quarterly results have jumped from 9.94% at the end of the March quarter last year to 13.41% this year”.
https://qz.com/1285932/sbi-pnb-and-10-other-indian-state-run-banks-post-6-billion-in-losses/
Yes Rattlesnake the debt is massive and who knows what the true number is when you look at the shadow banking scenario
[quote=”TradersCom” post=6595]Yes Rattlesnake the debt is massive and who knows what the true number is when you look at the shadow banking scenario[/quote]
Agree, and very true about the shadow banking system in China.
IMHO in a worst-case-scenario, should a worst-case-scenario happen to occur at some point in the future, total government debt for China is still low enough to where Beijing could bail out the major Chinese banks, but that leaves the situation of what happens to all the Chinese shadow banks and NON-financial business sector debt in China. Since 2012 have kept track of debt in China by category (aka government sector debt, household debt, and business sector debt), and when looking at time series graphs of amount of NON financial business sector debt on a year-over-year basis in China for the past 11+ years it’s amazing how much non-financial business sector debt has increased in China in the past 11+ years.
^^^ +1 and +1 on excellent comments … yes, the “good book” tells one “not to be a prisoner of DEBT” as over $20 TRILLION for USA is not good either
Overnight The World Bank with their latest China Economic Update
Leaves its estimate for China GDP growth unchanged:
6.5% 2018
6.3% 2019
– Sees drags from tighter policy and trade ‘moderation’
– Sees gradual growth slowdown still[quote=”Rattlesnake” post=6597][quote=”TradersCom” post=6595]Yes Rattlesnake the debt is massive and who knows what the true number is when you look at the shadow banking scenario[/quote]
Agree, and very true about the shadow banking system in China.
IMHO in a worst-case-scenario, should a worst-case-scenario happen to occur at some point in the future, total government debt for China is still low enough to where Beijing could bail out the major Chinese banks, but that leaves the situation of what happens to all the Chinese shadow banks and NON-financial business sector debt in China. Since 2012 have kept track of debt in China by category (aka government sector debt, household debt, and business sector debt), and when looking at time series graphs of amount of NON financial business sector debt on a year-over-year basis in China for the past 11+ years it’s amazing how much non-financial business sector debt has increased in China in the past 11+ years.[/quote]
Its astonishing really and yet promoted by the west so we couldn’t lower our living standards – the amount of foreign in that shadow debt is huge – of course much of it is straight out laundering but I wonder how much is comingled or even ponzi?
I think China was wise with their last PBoC chief and he isn’t ignorant of it – good points on worst case.
Then we have Italy ….
[quote=”Helmholtz Watson” post=6603]Overnight The World Bank with their latest China Economic Update
Leaves its estimate for China GDP growth unchanged:
6.5% 2018
6.3% 2019
– Sees drags from tighter policy and trade ‘moderation’
– Sees gradual growth slowdown still[/quote]If they maintain these rates than that is healthy as they transition – Australia’s issue would be if dramatically slows down
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