Why China’s Growing Debt Load Worries the World -
By KEITH BRADSHERMAY 24, 2017
Moody’s Investors Service downgraded its rating of China’s sovereign debt one notch on Wednesday,
citing concerns over growing debt in the country, which has the world’s second-largest economy.
Now it has 70 percent more money sloshing around its economy than the United States does, even though the American economy is bigger.
A trade war with the United States could mean fewer dollars coming into China to offset money headed abroad, though
President Trump is no longer using the type of language about trade with China that he did on the campaign trail.
Goldman Sachs looked last year at how fast debt had accumulated relative to the size of the economy in 55 countries since 1960.
It found that by the end of 2015, China was already in the top 2 percent of all credit expansions — and its debt shot up even higher last year.
The country’s debt as a percentage of economic output has been growing steeply since the global financial crisis,
and is expected to continue rising at least through next year.
