The case for the prosecution: George Soros, who is considerably richer than you, says China’s debts remind him eerily of the US pre-2008. The defence: people often say this sort of thing, and China always shrugs it off.
Sure, its borrowing generates remarkably scary numbers. With every flavour included — households, local and central government, corporate — HSBC puts debt at 249 per cent of GDP. Annual credit growth is 15 per cent, twice that of nominal GDP. Central government is obscurely entwined in much of it, backing state-owned enterprises and local municipalities.
But the defence has some strong points. Being much poorer, China has much more potential to grow than pre-crisis America. It finances its own debts, more or less: households lend to banks, who lend to corporates — the reverse of the subprime wheeze.