FINANCIAL CRASH WARNING: China’s debt could cause economic disaster ‘worse than 2008’
CHINA’S mounting debts are a huge cause for concern and could blow up into a financial crisis worse than 2008, experts have warned.
By LANA CLEMENTS
Express.co.uk
Sat, Feb 11, 2017
The colossal country has seen its GDP to debt ratio soar to eye-watering levels, from 148 per cent at the end of 2007 to around 277 per cent at the end of 2016.
Fears over China’s slowing economy triggered a huge stock market crash in 2015 and again at the start of last year.
However, policymakers managed to ease fears with actions to prop up markets and the economy.
At the end of last year, the Asian economy was growing by a bumper 6.8 per cent.
But the expansion is being fuelled by spiralling debts.
And its feared the economy could start to slowdown in the coming months, as actions by officials begins to fade.
Sky-high debt combined with a slowing economy is a toxic mix, experts have warned.
Sheridan Admans, investment research manager at The Share Centre, said: “China’s continues to pile on the debt at a worrying rate.
“The only comfort at this time is that it is internal rather than external debt.
“China has been working on ways to tackle this problem but such a sharp increase combined with the delays in coping with debt mountains, have previously been the cause of financial crises the world over.”
Credit in China is now approaching a historic crisis level, according to Anthony Doyle, investment director in the M&G Fixed Interest team.
He said: “The problem with heavily indebted economies is that the financial cycle could peak at any time.
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