Five Myths about China‘s Economy

Myth 1: China has a dangerous overhang of debt
Debt levels in China appear to have climbed to dizzying heights over the past two decades. As of the third quarter of 2018, China’s debt-to-GDP ratio stood at a staggering 274%¹, which is more than triple its level of 84% in 1996. The generous availability of credit has been a key factor driving China’s stunning economic expansion which saw the country average a GDP growth rate of 10%
per annum between 1980 and 2011². However, as China’s economic growth falls, there are concerns that China’s highly leveraged economy could collapse like a house of cards. But other factors suggest investors should not be overly concerned… read more