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Cracks in China's economy as credit crunch bites
The latest HSBC China PMI survey has more worrying data from the world’s second largest economy, it’s at a 7 month low and shows that factories are cutting jobs at the fastest rate for 5 years. The new data adds more fuel to the debate about China in 2014. As the Chinese government attempts to re-balance the economy by moving away from an export driven model to one that relies on consumer spending, economists are worried that the required high speed gear change may not be smooth; causing China's economic engine to splutter.
It’s true
that the low PMI numbers won’t worry Beijing too much, as the government is intentionally trying
to slow down the vast economy, but the data adds to worries about China’s huge
debt bubble. Debt is now at around 200 percent of GDP. the shadow banking sector is as big as the US and European banking sectors combined, and growing. Debt is now growing much faster than actual growth.
01:51 minutes
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