The Economist on China’s enormous debt: ‘The great hole of China’

Published: October 19, 2014 at 10:45am

great hole of china

Muscat asia

The commercial arm of the The Economist Group has been doing a lot of sucking up to the government of Malta (and other Third World or ‘developing’ governments) with conferences and suchlike for hard cash in a very difficult publishing environment.

And because these talking shops are commissioned and financed by client governments and authorities rather than properly real conferences, not one speaker was brought forth to say what Malta’s begging-bowl ‘deals’ with China mean for the present and future of this Mediterranean minnow.

But we can always read The Economist itself rather than go to one of its conferences featuring prominent guest speakers like Joseph Muscat.

There’s an excellent piece, published yesterday, called: Chinese Debt/The Great Hole of China.

China’s debt, it says, will not drag down the world economy, but it risks “zombifying” the country’s financial system.

“Of the many things that are worrying investors around the world, from tumbling oil prices to the spectre of inflation and recession in Europe,” the article begins, “one of the most important, and least understood, is China’s debt. For the past few years China has been on a borrowing binge (…). Since most financial crashes are preceded by a rise in borrowing (…) it seems reasonable to worry that China could be heading for a crash.”




8 Comments Comment

  1. ciccio says:

    What happened to China’s wall? Did Konrad hit it that hard that he wiped it away?

    • observer says:

      Yes, it seems he did – and precisely ‘gas down’ as we were warned.

    • Rumplestiltskin says:

      Maybe the Great Wall is the one that Simon Busuttil suggested, before the election, that Malta would smash into ‘gas down’ if Labour were elected.

  2. ciccio says:

    The situation described by The Economist is not going to help the Chinese yuan establish itself as an international currency. Professor Emeritus Edward Skunkluna had better rethink his strategy.

    • Tabatha White says:

      Goodness, Edward Scicluna’s “Chinese Dream.”

      Already a year old

      What on earth produces their off-track highs?

      Quite alarming.

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