China Is Heaping Debt On Its Least Productive Companies

[To-Whose-Benefit?]

zerohedge
Tyler Durden
Mon, 01/15/2018 - 19:00

[excerpt]

 https://www.zerohedge.com/news/2018-01-15/china-heaping-debt-its-least-productive-companies

Authored by Benn Steil and Benjamin Della Rocca via The Council of Foreign Relations,

When Chinese President Xi Jinping failed to mention the word 'deleveraging' in his long-awaited new economic blueprint in December it was clear that the political tug of war between the advocates of 'reform' and 'growth' had been won by the latter.

In the short-run, growth, as defined by changes in gross domestic product (GDP), can be increased by more lending and investing.

In the longer-term, however, lending and investing can’t boost GDP if it results in bad debt that is properly written down.