China Experts Ignoring the Elephant in the Room

George Magnus writes about a Chinese economic conference where no one is worried about the debt accumulation.

This reminds me of what far too many people said in the West in 2006-07, such as ‘It’s only the housing sector that’s overextended’, or ‘subprime loans are a miniscule proportion of bank assets’, or ‘it’s just sector-specific’. Yeah, right. What they missed was the rest of the iceberg of leverage and indebtedness, and how a a sudden interruption in funding, asset prices and growth exposed something that was systemic, not sector-specific.



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