The world’s second largest economy has a debt problem.
China’s credit boom has saddled unworthy businesses with large loans, fueled the country’s shadow banking system and put local governments on the hook for billions.
Swiss bank UBS calculates that central government debt was equal to 15% of the economy at the end of 2012. That number spikes to 55% when debt racked up by local governments and agencies is included.
If corporate and household debt is also counted, China’s total debt load balloons to more than 200% of gross domestic product.
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