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A comment on China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says. Parent comment

Re:China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says by Animats on Thursday May 25, 2017 @01:30AM (#14415460)
Pettis assumes, without justification, that the assets owned by the Government of China would be more productive in private hands, and thus calls for the government "to begin to sell off government assets". That's an ideological position. The privatization experience of the USSR indicates otherwise.

China's government debt situation isn't bad.[1] Government debt / GDP is less than half that of the US. Japan is much worse off, with the world's highest Government debt to GDP ratio.

What's really likely to hit China is the same thing that's hitting the rest of the developed world - it just doesn't take all that many people to make all the stuff. This is a killer for an export economy. This hit in Japan 20 years ago, in the US 10 years ago, and is starting to hit in China.

The biggest suggestion of trouble is that so many wealthy Chinese are trying hard to get assets out of the country. This fuels the Vancouver and London real estate booms, and in a lesser way, Bitcoin.

[1] http://www.tradingeconomics.com/country-list/government-debt...

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Re:China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says by seanmcdirmid on Thursday May 25, 2017 @01:37AM (#14415482)
As for government debt, it really depends on if you include SOE debt or not. So SOEs are technically companies owned by the state, but have implicit backing from the government that they won't go bankrupt, giving them access to easy credit from the biggest banks (also often state owned....).

Without the perception that moral hazard exists, this credit binge is really dangerous.

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Re:China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says by ryandamm on Thursday May 25, 2017 @11:03AM (#14417739)
No, the reason he suggests the government move assets into private hands is because his main thesis for how China can get out of the jam is to improve household consumption vis-a-vis growth in household wealth.

Not covered in the article I linked in particular, but his main idea is that China has had investment-fueled growth that's no longer sustainable; the foundation for all advanced, post-industrial economies is a robust consumer sector. China's is stunted at best. That's the motivation for transfers, not a productivity argument.

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Re:China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says by Animats on Thursday May 25, 2017 @01:20PM (#14418660)
improve household consumption vis-a-vis growth in household wealth.

He's complaining that China's individual savings rate is too high?

"Use it up. Wear it out. Make it last. Or do without." - U.S. Government, WWII.

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