China's economy grew 6.7 percent in the first half of the year, unchanged from the first quarter. Unfortunately, this has come at the expense of even more debt in the economy. From Reuters:
Another report from Reuters says that China's debt is a risk for global credit.
As China's economy notches up another quarter of steady growth, the pace of credit creation grows ever more frantic for every extra unit of production, as inefficient state firms swallow an increasing share of lending...
"The amount of debt that China has taken in the last 5-7 years is unprecedented," said Morgan Stanley's head of emerging markets, Ruchir Sharma, at a book launch in Singapore. "No developing country in history has taken on as much debt as China has taken on on a marginal basis."
Chinese companies will consume nearly two-thirds of new credit raised globally by 2020 as the world's second-largest economy leans on the corporate sector to support growth, said a report from S&P Global published on Thursday.
The report highlighted China's opaque and ever-expanding corporate sector and rapidly rising U.S. leveraged finance as key tail risks for global credit, with outstanding debt forecast to expand by half to $75 trillion by 2020.
However, it is not just China. Christopher Langner at Bloomberg says that debt is an Asia-wide problem.
Millions of words have been expended on China's debt problem. Two points need making: The danger is Asia-wide. And if an implosion is coming, it's most likely in the next three years.