发帖
雷达卡
The Chinese economy rebounded in 2017 but concerns about leverage and
potential deleveraging linger. In this thematic study, we update our previous work
(China’s Debt: Myths and Realities, June 2016) and take a comprehensive look
at China’s current debt situation, including leverage in the real economy and that
in the financial system. Then we dig deeper to explore the root cause of China’s
high leverage. Below are three key questions we have for the near term.
First, could the current debt level cause a crisis? We maintain the view
expressed in our 2016 report that the likelihood of a crisis is low. 95% of China’s
debt is funded by domestic savings. Also the government can reshuffle debt
across corporates, banks and itself. Meanwhile, capital controls have proved
largely effective. Finally, it’s problematic to compare China with Japan in the
1990s, as China today has much more room to catch up.
Second, how far will deleveraging go in 2018? Since the GFC, the Chinese
economy has leveraged up quickly, not only governments and corporates, but
also households. For instance, China’s household debt-to-GDP ratio has risen
by 29ppt during this period, while the US’s dropped by 17ppt. In 2018, we expect
deleveraging to remain the top priority for policy makers. Last year the focus was
on the financial system, but this year it will also include the real economy,
especially local government financing. Such efforts could lower credit growth and
weigh on infrastructure spending. That said, while the growth of debt could fall,
nominal GDP growth will likely also drop. As a result, the overall debt-to-GDP
ratio could stay the same or even edge up further.
Third, why is it so difficult for China to deleverage? High leverage is the
symptom, not the disease itself. Effectively deleveraging the real economy
requires tough structural reforms by local governments, SOEs and in the current
financial system. Meanwhile, deleveraging the financial system involves a
difficult trade-off between financial risk and financial development. On the one
hand, financial leverage remains a major concern so regulation should be further
tightened. On the other hand, China’s high savings rate implies a daunting task
of capital allocation. Without an effective financial system, it’s hard to stop
economic growth from falling in the long run. In that case, if policy makers still
want to maintain growth, they have to boost government
提升卡
置顶卡
沉默卡
变色卡
抢沙发
千斤顶
显身卡
京公网安备 11010802022788号
