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The parent is talking about total debt - public, household, and corporate. China's public debt isn't too much but the corporate debt is what has skyrocketed. Ma
by Analemma_ 9y ago
The parent is talking about total debt - public, household, and corporate. China's public debt isn't too much but the corporate debt is what has skyrocketed. Many analysts treat Chinese corporate debt as more-or-less equivalent to public debt (and don't do this for the United States), on the assumption that the government will bail out SOEs rather than allow them to fail and create widespread unemployment. That may or may not be true, but that's why they make statements like "China's debt is twice the United States'".
- cinquemb 9y ago>Many analysts treat Chinese corporate debt as more-or-less equivalent to public debt (and don't do this for the United States), on the assumption that the government will bail out SOEs rather than allow them to fail and create widespread unemployment I'd say this certainly gives a lot of political leeway in China, compared to having the opposite in place. I wonder if all the major US companies that were bailed out, that their debt should be considered public debt seeing there is already a precedent in place. But something tells me I doubt moodys will have a word on that.