‘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.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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