There are renewed calls for China to rein in its extraordinary mountain of debt or risk what Australia has been worried about for years — a “hard landing” for China’s economy.
The Bank for International Settlements warns China’s debt load is far too heavy and, worse still, it is growing at an eye-watering pace.
National Australia Bank (NAB) is nervous about China’s ballooning debt.
NAB chief economist Alan Oster said if the Chinese Government does not step in soon the world, and indeed Australia, will face another debt crisis within years.
“I think everybody’s on the hook,” he said.
The latest official global economic data shows China is sitting on a debt time-bomb, and the list of countries and global financial institutions that have pinned their hopes on a strong Chinese economy is impressive.
Australia is largely completely dependent on a healthy Chinese economy.
British banks alone have $695 billion worth of lending and business in China, including Hong Kong, meaning about 16 per cent of all foreign assets are held by UK banks.
