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IMF Warns China of High Corporate Debt

IMF Warns China of High Corporate Debt

The International Monetary Fund’s No 2. Official has urged China to tackle its rising corporate debt. These comments build on the recent warnings about China’s debt including an estimate of a possible $1.3 trillion loans extended to borrowers that don’t have sufficient income to cover interest payments.

“China’s economy grew in 2015 at its slowest pace in a quarter of a century and has been grappling with rising debt levels and overcapacity.”

~ Bloomberg

China’s economy grew in 2015 at its slowest pace in a quarter of a century and has been grappling with rising debt levels and overcapacity. The People’s Bank of China has warned in its mid-year work report that the government’s push to reduce debt levels and overcapacity could increase bond default risks and make it more difficult for companies to raise funds.

Related Reports: Reuters, Bloomberg, Wall Street Journal

 

About International Monetary Fund

The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944. The 44 countries at that conference sought to build a framework for economic cooperation to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.

The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.

Visit: IMF


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