China's central bank governor, Zhou Xiaochuan, made global headlines with a warning last month of the risks of a "Minsky moment", referring to a sudden collapse in asset prices after long periods of growth, sparked by debt or currency pressures.
On the sidelines of a key, twice-a-decade Communist Party Congress in October, Zhou referred to relatively high corporate debt and the fast pace of growth in household lending.
While also pledging to fend off such risks, Zhou has acknowledged it will take some time to bring debt down to more manageable levels.
Reuters analysis of 2,146 China listed firms showed their total debt at the end of September jumped 23 percent from a year ago, the highest pace of growth since 2013. The analysis covered three-fifths of the country's listed firms, but excluded financials, which have seen the brunt of government de-risking and deleveraging efforts so far.
The analysis revealed that debt in the real estate sector multiplied the most over last five years, followed by industrials.
by John H. Cochrane via PolicyEd.org
Financial crises come from bank runs. An innovative way to prevent bank runs is to use equity-financed banking. Equity-financed banks would replace debt with equity as their method of financing and back up all deposits with liquid assets like Treasury bonds. Since it would not hold any debt, bank runs would become a thing of the past.
Alex Brill | Macdonald-Laurier Institute
The US is headed toward a federal debt crisis certain to inflict serious economic hardship on future generations. Over the next 30 years, the US economy is expected to grow 76 percent, but the debt burden will increase by more than 240 percent. Returning to a sustainable fiscal outlook will require hard choices and a clear understanding of both what led us to this point and the economic consequences of inaction.