For starters, China has a very high saving rate – above 45% over the last decade, much higher than in the advanced economies – which enables it to sustain higher debt levels. Moreover, China’s banking system remains the primary channel for the deployment of the household sector’s savings, meaning that those savings fund corporate investment through bank lending, rather than equity financing (which accounts for only about 5% of net investment). Indeed, the sharp acceleration in the debt-to-GDP ratio is partly attributable to the relative underdevelopment of China’s capital market.
...Giacomo Corneo of the Free University of Berlin has proposed that, in addition to taxing underused real estate, China should create a sovereign wealth fund to improve the management of public assets. Given that those assets amount to an estimated $18 trillion, a higher return on capital would boost GDP and reduce debt. China’s bank regulators have already permitted experiments in debt-equity swaps, which the International Monetary Fund says should be incorporated in a comprehensive strategy to accelerate reform of state-owned enterprises.
China has the savings to address its growing debt burden.
中国广东暴雨持续 深圳发暴雨“红色警报”
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中国南部人口密度高、经济发达的珠江三角洲地区因连日持续的创纪录降雨,使当地一些城市遭受洪灾。 路透社报道说,自 […]...
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