Matthew O'Brien from the Atlantic says that in five years, China's shadow banks have increased credit from 120 to 190 percent of GDP, a bigger run-up than the...

Matthew O'Brien from the Atlantic says that in five years, China's shadow banks have increased credit from 120 to 190 percent of GDP, a bigger run-up than the U.S. housing bubble. Local governments and developers have been on a borrowing binge the past five years to build new infrastructure and new cities. China is getting rich now by building the things it needs to be rich, and putting it all on the credit card. The result, as the ratings agency Fitch points out, has been a bigger credit increase relative to GDP than just about anywhere else in history. In comparison, U.S. credit only went up 40 percentage points of GDP in the five years before the housing bubble popped. Read more: (VIEW LINK)


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