Tuesday, June 30, 2009

Chinese credit bubble yet to pop

Fitch Ratings warns that Chinese banks have a whole lot of bad loans due in the coming future. This seems odd since Fitch did absolutely nothing to forewarn the US credit crisis. There is probably more to this story than meets the eye.

But this article points out some excellent issues to ponder within the Chinese economy,

some key points,
China's banks are veering out of control. The half-reformed economy of the People's Republic cannot absorb the $1,000bn (£600bn) blitz of new lending issued since December.
" (he means $1 Trillian)

another interesting thought,
This is a surprise to me but Michael Pettis from Beijing University says China's public debt may be as high as 50pc-70pc of GDP when 'correctly counted'.

WOooOOOo. The Chinese government has much to fear from an economic instability, as many still recall the days of Mao, communism, revolutions, etc. This will end badly, one way or another.

0 Reflections: