China’s Addiction to Debt Now Threatens Its Growth -
RisingWorld
2017-05-26
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China’s Addiction to Debt Now Threatens Its Growth -
By KEITH BRADSHERMAY 24, 2017
SHANGHAI — China has gone on a spending spree, borrowing money to build cities, create manufacturing giants and nurture financial markets — money
that has helped drive the economic powerhouse in recent years.
“We should think first to stabilize leverage — that is, to stabilize the overall rate of leverage, or let it grow more slowly.”
Zhou Xiaochuan, the governor of the central bank, said the same month: “Every enterprise,
especially those with too high a rate of leverage, should be controlled.”
Foresea was among the first to be pinched.
The China Insurance Regulatory Commission in December banned Foresea from offering new products, contending
that the company was essentially selling high-yield debt even though it had permission to issue relatively low-risk life insurance.
By KEITH BRADSHERMAY 24, 2017
SHANGHAI — China has gone on a spending spree, borrowing money to build cities, create manufacturing giants and nurture financial markets — money
that has helped drive the economic powerhouse in recent years.
“We should think first to stabilize leverage — that is, to stabilize the overall rate of leverage, or let it grow more slowly.”
Zhou Xiaochuan, the governor of the central bank, said the same month: “Every enterprise,
especially those with too high a rate of leverage, should be controlled.”
Foresea was among the first to be pinched.
The China Insurance Regulatory Commission in December banned Foresea from offering new products, contending
that the company was essentially selling high-yield debt even though it had permission to issue relatively low-risk life insurance.
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