28 February 2014

Chinese debt worries and growth

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Chinese debt levels are rising too fast and the growth of its shadow banking sector poses risks. However, providing the authorities continue to gradually try and slow both down the risks should be manageable.

  •    Chinese growth looks like coming in around 7.5% this year. No boom, but no bust either.
  •    Chinese shares remain very cheap, providing the prospect of good medium term returns.


China bears have always been around. At their core seems a disbelief a so called “communist” country could grow so fast. But with China now being the world’s second biggest economy and the largest contributor to global growth their concerns get a lot of airplay. Last year it seemed “ghost cities” were the big worry. This year it’s shaping up as debt, shadow banking and wealth management products – particularly following defaults in the latter. To be sure China is not without risk – it will one day have a bust like all countries do periodically – but concerns still look overdone.

To read more, click here:  Chinese debt worries and growth – 19 February 2014

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