>When he says "China's debt problems", what exactly is he referring to? China’s response to the financial crisis was to loosen credit and “encourage” banks to

>When he says "China's debt problems", what exactly is he referring to? China’s response to the financial crisis was to loosen credit and “encourage” banks to lend. The result was that debt started rising faster than GPD and total debt now stands at 300% of GDP. Since GDP is the income needed to pay off debt there is a point where it is no longer sustainable. If there were no limit it would be possible to eliminate poverty by simply giving poor people loans. > When he says "there are also only four ways that Beijing can respond", what are they responding to and what is the goal of their response? With a looming trade war it is unlikely that China will be able to sustain the trade deficits with the US like it has in the past. It is also unlikely that China can find any other viable markets that could absorb exports that are currently destined for the US. China will want to mitigate the domestic impact of the outcome in a way that preserves domestic stability.