China’s debt is poised to soar over the next five years, severely reducing the chances the nation can avoid a financial crisis. Bloomberg Economics economists Fielding Chen and Tom Orlik estimate China’s total debt will reach 327 per cent of gross domestic product (GDP) by 2022, double the level in 2008. That will put China among the most indebted countries in the world. “The rapid growth and high level of China’s debt have already placed them in the danger zone for a financial crisis,” said the economists. “Adding debt equivalent to almost 70 per cent of GDP in the next five years wouldn’t mean a crisis is inevitable, but it would severely reduce the chances of avoiding one.”
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