Heroes of Ukraine

«Market Leader» - news and previews making you rich.

Tuesday, 18 December 12:58 (GMT -05:00)



Business And Politics News

China’s Debt Bubble May Trigger Another Global Financial Crisis


The Chinese economy keeps on slowing down as China’s debt bubble is growing. International experts are concerned about that. They are afraid of a new global financial crisis, Market Leader reports. The thing is, the Chinese economy is not growing fast enough anymore. Beijing has to admit the economic slowdown. The entire international expert community is now closely watching this slowdown and expressing their concerns about China’s economic prospects amid the mentioned economic slowdown and inflating debt bubble.

 

 

 

 
Once again, the experts are concerned that the current and future situation in the Chinese economy may eventually trigger another major economic crisis. In the meantime, the Chinese government is trying to calm everyone down. They assure us that China has switched to a new economic model but is still the locomotive of the entire global economy.
 
Industrial production, investments, retail sales, consumer activity, and many other sectors showed an unexpectedly low pace of growth in the first half of the year, which triggered some kind of panic in financial markets, Masterforex-V Academy reports.
 
International experts say that there is a reason to be worried since China makes up for more than 30% of the global economic growth. Given the fact that, China is the world’s second-biggest economy, any changes in there may trigger a global wave, the so-called domino effect.
 
The Chinese authorities are making excuses by saying that China has shifted from fast growth to moderate growth while optimizing the structure and transforming the growth model. The new model is designed to benefit from domestic consumption, service sector, and innovation. This means, China is gradually moving away from betting on exports and investments.
 
To prove that the Chinese economy is safe and sound, local media report about higher domestic consumption and bigger activity in the local service sector. Some of the problems are said to be temporary since Beijing is willing to sacrifice short-term high growth for a brighter longer-term economic future. Amid, the slowdown, China is boasting a pretty fast pace of growth when it comes to innovation. Local media report that China is now number 17 in the world in the national innovation index.
 
IMF experts are afraid of a debt boom
 

 

It’s interesting to note the fact that the sweet words came into play a few days after another IMF report on the current economic situation in China. The experts warn about the risk of a debt boom in China. They say that the economic growth in China has been seriously dependent on debt. That’s why they are worried that if another major crisis breaks out, the Chinese economy will suffer a lot and trigger the domino effect, thereby affecting all other economies. Despite the risks, the IMF improved the forecast for the Chinese GDP for 2017 in the mentioned report. They expect the Chinese economy to gain 6,7% this time and 6,4% next year. The previous forecast was 6,4% and 6,2% respectively. However, they warn that if the GDP growth turns out to be stronger, this may trigger higher debt burden. They remind us that the credit financing of the non-financial sectors has more than doubled over the last 5 years. Along with that, the ration between the debt and the GDP has already increased by 60% all the way up to 230% GDP. Given the similar cases in the history, the experts say that this is a dangerous curve for the Chinese economy and consequently for the entire global economy. In particular, the experts working for the IMF analyzed 43 debt booms around the world prior to arriving at this conclusion. In each of the cases, the mentioned ration was well above 100%. In almost all of the cases, the boom ended up with a serious economic slowdown or even an economic crisis. The experts are also concerned about the fact that consumption is low compared to the level of household savings. The IMF is not the only institution concerned about the pace at which China’s debt has been growing so far. In late 2016, The Financial Times reported that China’s debt had reached 225% GDP or almost 28 trillion dollars in absolute figures. For a developed economy the average figures are around 280%. The pace of debt growth in China does look scary. In 2008, it used to be just 147% GDP. George Soros thinks that the current situation in China resembles the one in the USA before the 2008 crisis when the country had considerable debt burden but still kept on accumulating more and more debt. Most representatives of the international expert community agree that China’s debt has already exceeded the critical level and China needs to do something about it.

 

You are free to discuss this article here:   forum for traders and investors

 

Add to blog
Got a question? – Ask it here »
 

USA Strikes Iran Again

As you probably know, a couple of weeks ago, the United States imposed a new round of sanctions on Iran. International experts say that the package includes 700 new points, including an embargo on the import of crude oil from Iran. It's interesting to note that the sanctions will touch upon some other states as well. Some temporary exception are said to have been maid for 8 partners of the USA.
Publication date: 29 November 12:04 PM

Trump Offers Putin to Compete for Multi-Polar World, Eggert Says

According to Konstantin Eggert, a Russian journalist writing for Deutsche Welle, Donald Trump is offering his Vladimir Putin to compete for a multi-polar world, but on American terms. In particular, he highlights the fact that many international experts started panicking when finding out that the USA had withdrawn from the missile control treaty with Russia. They say that this is the end of the strategic partnership between the United States ans Russia and the disruption of the nuclear arms control system created decades ago.

Publication date: 29 November 11:07 AM

The world is on the verge of another global race

International experts are commenting on the events taking place over the last few years. In particular, President and CEO of Atlantic Council Frederik Kempe believes that we are nearing another race between the world's biggest superpowers.
Publication date: 07 November 09:02 AM

Trump Wants More Control Over the Fed Since It's Too Independent

Donald Trump seems to have confirmed his authoritarian style of governing the state. If he has his way, he would probably turn himself into a king instead of a president. What are the reasons to think this way about the American president?

Publication date: 31 October 11:46 AM

Google Introduces Home Hub for $149

Google Corporation has released a couple of new devices, including several smartphone and a display named Home Hub. For those of you who don't know, Home Hub was introduced a couple of days after Facebook launched its first gadget - a smart screen. This device is designed to consume audio and video content from certain resources. It support voice control and is adjusted to the user's location. So, what is so special about Google Home Hub?

Publication date: 31 October 10:16 AM

New Sanctions May Drop Russian GDP

International experts are convinced that the near-term prospects of the Russian economy depend heavily on whether the USA expand the anti-Russian sanctions. They say the worst-case scenario is a 2.5% GDP drop.
Publication date: 29 October 11:14 AM

Russian Stocks Go Down Along With American Indexes

 Not so long ago, Russian stocks started going down in value. International experts say that this downtrend was mostly caused by external reasons. In particular, Russia's bigest stock index showed the biggest bearish move since April 2018. Back then, the Russian stock market used to be rather volatile because of the anti-Russian sanctions imposed on Russia by the United States.


Publication date: 28 October 11:49 AM

Crude Oil Prices May Reach $100/b

Ever since the United States imposed new sanctions on Iran, other oil exporters have been trying to make up for the decline in the international oil supply. Some experts are now predicting a strong trend all the way up to $100 per barrel. 

Publication date: 25 September 11:51 AM

New Anti-Russian Sanctions Will Slow Russian Economy Down, Kudrin Says

The new package of anti-Russian sanctions is expected ot be imposed by the United States in November. Apparently, this is not expected to become a disaster ofr the Russian economy, but it still may slow down the economic growth in Russia as well as the the flow of foreign investments to the country. This is what ex-Finance Minister of Russia Alexey Kudrin thinks on the matter.

Publication date: 19 September 12:10 PM

Cryptomarket Quickly Recovered From the SEC's Decision

The global market of cryptocurrencies quickly recovered from the downtrend after the SEC decided to ban the creation of Bitcoin ETFs.

Publication date: 24 August 10:00 AM