No short-term financial crisis for China, expert says, assailing ‘double standard’ on debt woes
‘People have invented the concept of productivity of credit to say bad stuff about China,’ said Dragonomics’ founding partner Arthur Kroeber
China is not headed for a near-term financial crisis, said one of the most esteemed experts on the country’s economy.
Arthur Kroeber, founding partner of the China-focused Dragonomics research service, debunked the contention that rising debt levels amid slowing GDP growth suggest China has a credit productivity problem that may tip the world’s second-largest economy into a tailspin.
In a discussion hosted by the New York-based China Institute, Kroeber pointed out that from the 1960s to the 1990s, the US, Japan and Canada saw their GDP growth decline while debt surged, all without any economic routs.
“GDP growth steadily decelerated even as credit growth continued to build [in the US, Japan and Canada]. There was no one in the 1980s who was pointing to these numbers saying ‘isn’t this economy heading for a collapse?’
“There is a double standard at work here, where people have invented the concept of productivity of credit to say bad stuff about China.”
