China: ‘Large Financial Crisis’ By 2012

9 Mar

From the Times Online:

Recently there have been even more alarming views on China. Victor Shih, of America’s Northwestern University, looked into 8,000 local governments in China and warned that a wall of “hidden borrowing” could push Chinese government debt to 96 per cent of GDP next year. He feared a “large financial crisis” as a worst case scenario by 2012. Kenneth Rogoff, of Harvard, fears that a Chinese asset bubble, fuelled by the recent surge in debt, could trigger regional recession within a decade.

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