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Finance Should Return to Common Sense, Original Purpose
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Finance Should Return to Common Sense, Original Purpose

Caixin Editorial Team
Caixin, 2017
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Editorial Rating

7

Qualities

  • Eye Opening
  • Hot Topic

Recommendation

The International Monetary Fund expects China to remain the world economy’s biggest source of growth through at least 2027. While the Chinese economy continues to grow, experts inside and outside China are increasingly worried about the country’s high debt levels and the risk of a collapse in asset values. An editorial by the media portal Caixin Global explains the roots of China’s heightened financial risk and calls for wide-ranging regulatory reforms to contain it. getAbstract recommends the succinct essay to professionals in the financial industry.   

Take-Aways

  • China’s financial system is vulnerable due to high leverage.
  • The borrowing practices of local governments trying to circumvent the central bank’s borrowing restrictions currently pose the biggest danger to the system.
  • Local governments have used infrastructure projects as debt financing tools – a practice that can result in the collapse of asset values.

About the Author

Caixin Global is the English-language portal of China’s financial media group, Caixin Media. 

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