The Chinese financial crisis of 2014?
ChinaFotoPress/Getty Images
Chinese gauges of financial stress — including the TED spread, which is the difference between interest rates on interbank lending and interest rates on government bonds — have widened sharply in recent days, suggesting that the Chinese financial system is under severe stress. The New York Times' Paul Krugman is worried:
Other economic commentators, including Michael Pettis, George Soros, and myself, have warned that China's fast-growing economy is heading toward turbulence due to the difficulty of making a transition from export-driven industrial growth to consumer-driven domestic growth. China's rapid economic growth has become increasingly and unsustainably debt-financed. Local government debt has soared over 20 percent in each of the last three years, far outpacing growth, and nobody actually knows quite how much debt China's notoriously opaque financial system is sitting on.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
John Aziz is the economics and business correspondent at TheWeek.com. He is also an associate editor at Pieria.co.uk. Previously his work has appeared on Business Insider, Zero Hedge, and Noahpinion.
-
The teenage 'maths prodigy' who turned out to be a cheat
Under The Radar Jiang Ping defied expectations in a global competition but something wasn't right
By Chas Newkey-Burden, The Week UK Published
-
Puppet shows, pagodas and pho: a guide to Hanoi
The Week Recommends Vietnam's capital city blends the ancient with the new
By Catherine Garcia, The Week US Published
-
'There are benefits, but not acknowledging them would tell only half of the story'
Instant Opinion Opinion, comment and editorials of the day
By Justin Klawans, The Week US Published
-
British warship repels 'largest Houthi attack to date' in the Red Sea
Speed read Western allies warn of military response to Iranian-backed Yemeni rebels if attacks on ships continue
By Richard Windsor, The Week UK Published
-
Houthi rebels claim Red Sea ship attacks
speed read Iran-backed Yemeni group vows to escalate aggression towards Israel-linked vessels in revenge for Gaza war
By Harriet Marsden, The Week UK Published
-
Israel plans next phase of Gaza war as first hostages released
Speed read After four-day ceasefire 'we will not stop' until destruction of Hamas, says Israel
By Harriet Marsden, The Week UK Published
-
Mob storms Russian airport 'looking for Jews'
Speed Read Plane from Israel surrounded by rioters chanting antisemitic slogans after landing in Russia's Dagestan region
By The Week UK Published
-
Tuberville's military promotions block is upending lives, combat readiness, 3 military branch chiefs say
Speed Read
By Peter Weber Published
-
Ukraine's counteroffensive is making incremental gains. Does it matter in the broader war?
Speed Read
By Peter Weber Published
-
US commissions first-ever Navy ship in a foreign port
Speed Read
By Justin Klawans Published
-
British spy chief, Wagner video suggest Prigozhin is alive and freely 'floating around'
Speed Read
By Peter Weber Published