A massive Chinese industry is flashing warnings signs the world cannot ignore
Linette Lopez
BusinessInsider.com
Oct. 28, 2015
China’s steel industry, the biggest in the entire world, is in crisis.
The disaster has come due to a combination of factors, including a slowing Chinese economy, falling commodity prices, and an industry loaded with debt.
Earlier this month, state-owned enterprise Sinosteel defaulted on a debt interest payment of $315 million on bond notes maturing in 2017.
It’s a sign that, despite China’s best efforts at fiscal policy easing and pledges to reform “zombie” SOEs, the worst may be coming faster than policymakers expected.
The pride of old China
China’s economy is trying to make the difficult transition from one based on investment to one based on domestic consumption, so it’s useful to think of its economy in two parts — new China and old China.
New China includes businesses in the services sector, like technology, retail, and banking.
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