CHINA is on course for a full-scale financial meltdown that could cause havoc across the globe, suggest early warning indicators tracked by the world’s central bank watchdog.
The seeds have been sowed for potential financial distress in the world’s second-largest economy, according to the Bank for International Settlements (BIS).
Soaring credit growth relative to China’s GDP is a huge cause for concern that could result in financial overheating and distress, warned the organisation – thought of as the central bank of the world’s central banks.
Any score above 10 is a worry but China’s gap is measured at a huge 30.1 – higher than even the US before the financial crisis.
The debt service ratio in China, which monitors income with interest payments are also a concern, BIS data showed.
Fears over China’s debts coupled with its slowing economy, triggered a huge stock market crash at the start of the 2016 and during the summer of 2015.
Experts raised the alarm in July after a slew of worrying economic data was released by China.
Full article: China warning: Economy set for financial MELTDOWN amid soaring debt levels (Express)