China will be forced to move from export-driven growth to domestic consumption driven growth, which means that it cannot sustain high growth for long. As its growth falters, the huge stockpile of debt it is sitting on will slow it down further. With a debt to GDP ratio of around 300 per cent which has grown dramatically over the past decade and soared to record levels due to the pandemic, debt is the biggest economic challenge facing China. The US and Japan also have similar levels of debt, but while the state-controlled corporate sector debt accounts for 160 per cent of China’s GDP, government debt constitutes the largest component of debt for US and Japan. (Read More)
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