Next China: The Ticking Debt Bomb

It turns out trade wars are not just painful but also very loud, so much so that they can drown out some fairly consequential things, Bloomberg News reported. One of those is debt. And in the Chinese context, we should note that there is a lot of it and it has increased very quickly. Bloomberg Economics estimates that the country’s total debt ballooned about five-fold in the decade through 2018 to roughly $35 trillion. It’s a problem that’s been variously described as a mountain, a horror movie and a ticking bomb, but also one that’s gone less noticed in the past two years as Washington and Beijing have volleyed tariffs at one another. Now might be time to start paying attention again. One sign of that is Tewoo Group, a commodities trader that looks poised to become the most-high profile state-owned company to default on a dollar bond in more than two decades. Read more

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