The last post I wrote about China's high debt and excess capacity. I must confess that I was not much convinced by my argument, so I is investigating a little further. Morgan Stanley's Wang Qing, on 31 March written 2010 on the debt:
China's total debt is low at 170% of GDP compared with developed countries in the total debt of 250% -500%. Next is the external debt relevant because national debt can be offset with the national assets. China has the lowest external debt of the world . Although the ability to generate cash flows, etc. is considered, can be identified no systemic risk. However, the opacity of some local banks in the quality of its loan portfolio, which puts a damper on stock prices.
China's total debt is low at 170% of GDP compared with developed countries in the total debt of 250% -500%. Next is the external debt relevant because national debt can be offset with the national assets. China has the lowest external debt of the world . Although the ability to generate cash flows, etc. is considered, can be identified no systemic risk. However, the opacity of some local banks in the quality of its loan portfolio, which puts a damper on stock prices.
Regarding excess capacity, it is clear that these are made in real estate and heavy industry. I doubt, however, that these sectors can drag the economy into the abyss. Moreover, the recent interest rate hikes introduced to limit the growth in capacity.
On 22 October 2010 preconceived Gregory Peters and Jason Draho the situation is as follows: The quantitative easing supports risk-taking: Buy the U.S. dollar and buying preference shares of Emerging Markets.
is again: Do not fight the Fed!
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