Will China crash into financial crisis?

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As China slows with a receding credit tide, its titanic armies of naked swimming businesses are exposed. So far, the headlines have been hogged by Huarong and Evergrande but there are many other defaults and the potential victims in opaque Chinese debt daisy chains are limitless.

This is one reason why I do not expect China to enter an acute financial crisis. Rather, these irresolvable debts will drag the entire economy down over time into a bog of slow growth as bad debt is rolled over forever.

That said, we do go through these periods of reform that threaten instability and possible crisis. So where are we now? Goldman has more:

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.