‘China’s Debt Avalanche Is the Biggest Worry’

China’s slowing economy and market rout may be capturing headlines, but the root problem is the mainland’s massive debt load, top China banking analyst Charlene Chu, told CNBC.

“We need more focus on this debt problem in China because that really is what’s at the root of everything,” Chu, who is senior partner at Autonomous Research Asia, told CNBC’s Squawk Box. “The market is nervous because we’ve got a debt problem that the authorities aren’t addressing.”

Chu said China’s debt boom may even be the world’s biggest in such a short period of time.

“The size of banking sector assets has gone from $9 trillion in 2008 to $30 trillion at the end of 2015,” she said, noting that most of these borrowings went to the corporate, not the household, sector.

A lot of that debt went toward assets that aren’t performing, she added.

CNBC

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Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.