- Joined
- Jun 13, 2005
- Messages
- 61,626
- Reaction score
- 25,719
China's debt tops 300% of GDP, now 15% of global total: IIF
In the West this glorified Ponzi scheme shifting the burden of debt has historically depended on an influx of cheap immigrant labor, and tapping the large worker populations of foreign countries with outsourcing (that will presumably be further sustained by an ever-increasing population). Whether from abroad or from the future, it always needs to find more people to hold the bag. Yet China has aggressively sought to curb their own population growth, and insofar as international trade is concerned, they strongly prefer exporting goods, not outsourcing jobs, though some will point to their activities in the Middle East and Africa as examples of patterning themselves after the behavior of "imperialist capitalists". They are staunchly xenophobic on the matter of immigration.
I'm not sure how much longer they'll be able to keep it up. It appears they've admitted a larger government doesn't inherently translate to a larger economy, here. I envy meaningful infrastructure spending, but unless you nibble from the rest of your budget, you can't simultaneously raise spending while cutting taxes without exacerbating the debt problem in the long term.
Well, if you were worried about our overspending, you only need be thankful you don't live in a socialist economy. Their GDP growth always looks great, which provokes envy and fear in us, but probing deeper, their GDP growth-to-debt ratio is catastrophic.Reuters said:(Reuters) - A key gauge of China’s debt has topped 300% of gross domestic product, according to the Institute of International Finance (IIF), as Beijing steps up support for the cooling economy while trying to contain financial risks.
China’s total corporate, household and government debt rose to 303% of GDP in the first quarter of 2019, from 297% in the same period a year earlier, the IIF said in a report this week which highlighted rising debt levels worldwide...
“While authorities’ efforts to curb shadow bank lending (particularly to smaller companies) have prompted a cutback in non-financial corporate debt, net borrowing in other sectors has brought China’s total debt to over $40 trillion - some 15% of all global debt,” the report said.
“Of note, onshore bond issuance suggests a big pickup in borrowing by local governments and banks this year.”
China’s economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting U.S. trade pressure.
To revive investment and protect jobs, Beijing has been encouraging banks to lend more, particularly to struggling smaller firms. It has also unveiled billions of dollars in tax cuts and infrastructure spending.
In the first half of this year, local governments’ total net bond issuance reached 2.1765 trillion yuan ($316.5 billion), the finance ministry said on Tuesday.
Chinese officials have said repeatedly said debt risks are manageable overall.
In the West this glorified Ponzi scheme shifting the burden of debt has historically depended on an influx of cheap immigrant labor, and tapping the large worker populations of foreign countries with outsourcing (that will presumably be further sustained by an ever-increasing population). Whether from abroad or from the future, it always needs to find more people to hold the bag. Yet China has aggressively sought to curb their own population growth, and insofar as international trade is concerned, they strongly prefer exporting goods, not outsourcing jobs, though some will point to their activities in the Middle East and Africa as examples of patterning themselves after the behavior of "imperialist capitalists". They are staunchly xenophobic on the matter of immigration.
I'm not sure how much longer they'll be able to keep it up. It appears they've admitted a larger government doesn't inherently translate to a larger economy, here. I envy meaningful infrastructure spending, but unless you nibble from the rest of your budget, you can't simultaneously raise spending while cutting taxes without exacerbating the debt problem in the long term.