As China’s economy’s growth slows, they look to lower debt and increase long term stability. The key is to be able to deleverage and still grow, and the way China can do this is by continuing to develop their service economy. Over the past two years credit growth has dropped from 16% to 12% mainly a result of deceased borrowing in the industrial manufacturing sector. This is good news for China who has been attempting to deleverage and shake up state owned enterprises for a while, but it will be interesting to see if this is successful or if they enter a banking crisis with the impending trade war.
https://www.google.com/amp/s/www.bloomberg.com/amp/view/articles/2018-04-05/china-cuts-debt-while-sustaining-economic-growth
1 comment:
The Chinese economy is an interesting machine. As the rise of Artificial intelligence and factory automation persists it will be interesting to see if they will be able to keep their industrial competitive edge with their giant population and ability to keep wages low.
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