China's Growing Debt Since the Financial Crisis

An interesting article came up today when I was reading my usual couple of websites, which includes the Economist. This article concerned China's growing debt to GDP ratio that seemed to accelerate ever since the 2008 Financial Crisis. The growing debt seemed to be fueled by the growing credit boom, which has been further fueled by continued speculative construction. As the Chinese economy slows, most of this debt then increases to dangerously high levels, which is currently reaching at a level of above 200% of GDP. This number should be something to watch in the years down the road. The article doesn't mention much about the possible global implications for a possible meltdown, but if it does, I predict it could be worse than the 2008 Financial Crisis.

In another article that is connected to the other article, the piece gives us an idea of what the Chinese authorities could do to mitigate the inevitable. By looking at the chart that the article provided, most of this recent debt boom is from the credit-fueled continued construction bubble that is undertaken in China. The International Monetary Fund has warned repeatedly about the discerning possibility of a sharp and eventual Japan-style property meltdown. There could be many policies implemented in fixing this looming problem, but one of the main things that the international community and China could do is rein in the deep obsession with GDP growth and focus on other more important issues.