China debt – Will it explode?

To some extent, China’s slowing economy is necessary. I think it’s kind of bizarre to have this high economic growth rate for 30 years. So, I think it makes some other sense. I think what’s happening is a controlled slow down. It makes little difference if the economic growth slows from 7 percent to 6 percent or 5 percent because the economy is still growing. People’s lives are getting better every year and the economy is expanding. The key problem would be if the economy starts shrinking, but it’s not – it’s still growing, but at a less rapid pace. This does mean that the pressure on Chinese companies inside China is getting bigger. They need to be more efficient; they need to be using their resources more effectively; they need to make sure that they go higher up in the value chain.

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