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In The Last Seven Years, China Accounted For 40% Of All Global Debt Creation
So yes, China debt is growing well over 100% faster than its GDP, a condition which isprecisely the opposite of Ray Dalio's “beautiful deleveraging”, and the outcome is clear to all.
And yes, while two years ago few had a sense of the true proportion of China's debt load, now virtually everyone does, which is why its credit creation will be put under a microscope.
But what does that mean in practical terms?
Simple: recall that it was China's (and the entire EM sector) furious debt issuance spree in 2008 and onward that together with central bank QE, prevented the world from collapsing into an all out depression. But since China's exponential credit growth delayed the inevitable, it also means that any slowdown in China's credit growth (or outright debt destruction if and when the massive debt defaults and NPLs are finally recognized) will put the world right back into the deferred depression …. http://www.zerohedge.com
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