Many people point to China’s increasing debt levels as a warning sign that this kind of crash could be imminent. China’s total debt has surpassed 300 percent of GDP; for reference, the U.S. was at about 380 percent on the eve of the Great Recession. Government officials have warned that Chinese banks are highly leveraged. And some economists point to signs that China’s real estate market is in a bubble.Sponsored Ads
China has shown remarkable resilience during the past two years, defying the critics, avoiding a currency crisis, stemming the bleeding from its stock market crash and preventing its housing market from imploding. But the fundamental vulnerabilities remain. And that poses risks for the U.S. economy.