Category Archives: debts

China´s unsustainable debts – Victor Shih

China has accumulated debts US$25 trillion and because of the relative high interest rates, that level of debt is unsustainable, argues financial analyst Victor Shih at the USC U.S.-China Institute. And when China gets into trouble, there is no IMF-style institution with enough capital to save it. A crashing stock market also does not help.

China´s fiscal deficit makes sense – Sara Hsu

China´s fiscal deficit will be the largest in six years. Financial analyst Sara Hsu explains why this is a good move, so it can encourage spending, she writes in the Diplomat.

Strains in China´s property market – Sara Hsu

Smaller developers are the first ones to feel the contraction of China´s real estate market, writes financial analyst Sara Hsu in the Diplomat. The US$23 million default of the Kaisa group might only be the beginning or more trouble.

Also land sales now scrutinized – Sara Hsu

President Xi Jinping anti-corruption drive has opened a new front as land sales by local governments are surveyed by the central government, notes financial analyst Sara Hsu in TripleCrisis, and she applauds the move. Much of the social unrest in the past years has been caused by those transaction, where citizens often lost from greedy officials.

The interaction between political and financial elites – Victor Shih

Scholar Victor Shih is interviewed by the China Daily, on how he analyzed the links between different factions in China´s politics. A dive into China´s capital markets since 2009, achieved Victor Shih high praise as one of the first to document China´s serious debts.

Analysts confused on China´s growth forecasts – Sara Hsu

The recent predictions on China´s economic development could not have been more different. The Conference Board predicts gloom. The Asia Society finds China is ready for sweeping reforms. Our financial analyst Sara Hsu see slower growth, but also room for reforms, she writes in the Diplomat.

Manipulating financial data – Victor Shih

China has a long tradition of manipulating its financial data to meet its political needs. That ability is still prominently present, also today, says political scientist Victor Shih in the Global and Mail. China´s economy is much weaker than official figures suggest.

How can China reduce its debts? – Sara Hsu

China has a longstanding tradition in creating huge debts, and the burden has been growing over the past year, as the government decided to bail out failing companies, rather than let them collapse. That system has to change, writes financial analyst Sara Hsu in the Diplomat.

China´s finance, between bears and bulls – Sara Hsu

Last year China promised it would not bail out its unruly financial sector. It still did. It promised swiping financial reforms. They did not materialize. Financial analyst Sara Hsu discusses the current state of China´s finance and what the government should do. Asking questions are Chao Pan and Fons Tuinstra.

New bad banks do not solve local fiscal problems – Sara Hsu

China´s is setting up five asset management companies or bad banks to buy up bad debts on a local level, comparable to five national firms that bailed out China´s largest banks in the 1990s. But that will not help, if the current fiscal dilemmas for local governments are not solved, writes financial analyst Sara Hsu in the Diplomat.