clb09
03-01-2010, 06:43 AM
http://www.businessweek.com/news/2010-02-28/harvard-s-rogoff-gives-legs-to-china-crash-talk-william-pesek.html
Victor Shih of Northwestern University in Evanston, Illinois, is focusing on another $1.6 trillion figure. That’s how much debt he estimates China’s local governments are sitting on. If the argument Shih fleshed out in a Feb. 8 piece in the Wall Street Journal is correct, local debt alone is one-third of China’s 2009 gross domestic product and 70 percent of foreign- exchange reserves.
Between the U.S. and China, we’re talking lots and lots of debt. Any unraveling on either side of the Pacific would devastate the global economy.
It’s becoming less of a Black Swan scenario, and more a crisis unfolding in slow motion. G-2 risks should be of growing concern to investors, the CIA and perhaps even thriller writers.
http://www.ft.com/cms/s/0/9cc4c144-1f52-11df-9584-00144feab49a.html?nclick_check=1
Historical comparisons suggest there is something unprecedented in China's investment boom. Even before last year's surge, the Economist Intelligence Unit notes, China's investment-to-GDP ratio was the same as Thailand's on the eve of the 1997-98 Asian financial crisis, or Japan's at its peak during its high investment phase in the 1960s.
Victor Shih of Northwestern University in Evanston, Illinois, is focusing on another $1.6 trillion figure. That’s how much debt he estimates China’s local governments are sitting on. If the argument Shih fleshed out in a Feb. 8 piece in the Wall Street Journal is correct, local debt alone is one-third of China’s 2009 gross domestic product and 70 percent of foreign- exchange reserves.
Between the U.S. and China, we’re talking lots and lots of debt. Any unraveling on either side of the Pacific would devastate the global economy.
It’s becoming less of a Black Swan scenario, and more a crisis unfolding in slow motion. G-2 risks should be of growing concern to investors, the CIA and perhaps even thriller writers.
http://www.ft.com/cms/s/0/9cc4c144-1f52-11df-9584-00144feab49a.html?nclick_check=1
Historical comparisons suggest there is something unprecedented in China's investment boom. Even before last year's surge, the Economist Intelligence Unit notes, China's investment-to-GDP ratio was the same as Thailand's on the eve of the 1997-98 Asian financial crisis, or Japan's at its peak during its high investment phase in the 1960s.