Newspaper article News Mail Bundaberg Qld.

Increasing Corporate Debt Burden Worries China's Central Bank Governor

Newspaper article News Mail Bundaberg Qld.

Increasing Corporate Debt Burden Worries China's Central Bank Governor

Article excerpt

CHINA'S central bank governor has added to the chorus of high-level alarm in Beijing over the country's still fast-rising corporate debt burden.

Zhou Xiaochuan of the People's Bank of China told the China Development Forum the ratio of credit to national income was out of hand.

''Lending and other debt as a share of GDP, especially corporate lending and other debt as a share of GDP, is on the high side,'' he said.

Mr Zhou added that excessive corporate leverage created the potential for macroeconomic risks.

Estimates put the debt to GDP ratio of Chinese corporates at about 180% of GDP. Total debt to GDP - which includes government and household debt - is thought to be about 250%, which is extremely high by the standards of other emerging economies.

The central bank boss's comments follow warnings from other senior Chinese officials and also echo the long-standing concerns of organisations such as the International Monetary Fund and the Bank for International Settlements about the credit-intensity of China's growth since the Global Financial Crisis. …

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