IMF Paper: China corporate debt window ‘closing quickly’ - BBG

Dhwani Mehta FXStreet

An International Monetary Fund (IMF) working paper published on Tuesday via Bloomberg, revealed that China urgently needs a plan to address a buildup of corporate debt that is manageable but with a window to address it "closing quickly,"

Key Points from the IMF paper:

“The rapid increase of debt since the global financial crisis has left China with a credit gap comparable with those experienced previously by countries such as Thailand, Spain and Japan that subsequently experienced "painful deleveraging,"

“China’s risks appear high but are manageable if the problem is addressed promptly”

"International experiences suggest that credit booms of this size increase the risk of slower growth or a disruptive adjustment,"

"The authorities recognize the problem, but appear to be still searching for a comprehensive, proactive, strategy."

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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