{"id":43521,"date":"2019-02-04T16:36:50","date_gmt":"2019-02-04T21:36:50","guid":{"rendered":"https:\/\/olduvai.ca\/?p=43521"},"modified":"2019-02-04T16:36:52","modified_gmt":"2019-02-04T21:36:52","slug":"chinas-zombie-companies-are-a-big-threat-to-the-economy-and-jpmorgan-says-their-debt-pile-means-the-country-could-be-slowing-faster-than-anyone-thought","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=43521","title":{"rendered":"China&#8217;s &#8216;zombie&#8217; companies are a big threat to the economy \u2014 and JPMorgan says their debt pile means the country could be slowing faster than anyone thought"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.businessinsider.com\/jpmorgan-china-zombie-corporate-debt-pile-derailing-economic-growth-2019-2\">China&#8217;s &#8216;zombie&#8217; companies are a big threat to the economy \u2014 and JPMorgan says their debt pile means the country could be slowing faster than anyone thought<\/a><\/h3>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/amp.businessinsider.com\/images\/5c58308f0d15f5432d46f694-750-375.jpg\" alt=\"china guard zombie monster\"\/><figcaption>JPMorgan says China should get rid of its &#8220;zombie&#8221; state-owned companies.<\/figcaption><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li><strong class=\"\">China&#8217;s economy is beset by huge public and corporate debt problems which threaten to derail the country&#8217;s growth story, according to JPMorgan.<\/strong><\/li><li><strong class=\"\">Economic growth in China has been steadily slowing and could get even lower meaning the world&#8217;s second largest economy won&#8217;t overtake the US any time soon.<\/strong><\/li><li>The key risk \u2014 disposing of &#8220;zombie&#8221; state-owned companies \u2014 means the economy could be forced to adopt a zero interest policy, JPMorgan said.&nbsp;<\/li><\/ul>\n\n\n\n<p>The US-China trade war is in more of the headlines, but there&#8217;s an even greater problem for the world&#8217;s second largest economy.&nbsp;<\/p>\n\n\n\n<p>&#8220;The biggest concern regarding financial stability and the sustainability of economic growth has been China&#8217;s ballooning debt problem, especially in the co&nbsp;rporate sector,&#8221; according to a note published by JPMorgan.&nbsp;<\/p>\n\n\n\n<p>Chinese corporate debt is among the highest in the world \u2014 it&#8217;s a stunning 162% of GDP.<\/p>\n\n\n\n<p>The country&#8217;s debt will take serious and prolonged policy changes to rectify, said the economists led by Chief China economist Haibin Zhu. China&#8217;s slowdown comes alongside other economic red flags \u2014 from its economy including poor PMI figures, lower exports, an aging workforce, and spiralling household debt.&nbsp;<\/p>\n\n\n\n<p>JPMorgan pushes back on estimates that\u00a0<a href=\"https:\/\/www.businessinsider.com\/us-economy-to-fall-behind-china-within-a-year-standard-chartered-says-2019-1\">China will soon overtake the US as the world&#8217;s biggest economy,<\/a>\u00a0predicting that China&#8217;s growth potential will slow from the current 6.5% level to 5.5% in 2021 through 2025 and 4.5% in 2026 through 2030.\u00a0<\/p>\n\n\n\n<p>&#8220;This means that China will remain the second largest economy much longer than expected,&#8221; the economists said.&nbsp;<\/p>\n\n\n\n<p>&#8220;The transition to slower potential growth could be volatile and requires balancing reforms,&#8221; they wrote. &#8220;This will reshape China&#8217;s role in the global economy.&#8221;<\/p>\n\n\n\n<p>&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>China&#8217;s &#8216;zombie&#8217; companies are a big threat to the economy \u2014 and JPMorgan says their debt pile means the country could be slowing faster than anyone thought China&#8217;s economy is beset by huge public and corporate debt problems which threaten to derail the country&#8217;s growth story, according to JPMorgan. Economic growth in China has been [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[9218,24302,130,3053,11031],"class_list":["post-43521","post","type-post","status-publish","format-standard","hentry","category-economics","tag-business-insider","tag-callum-burroughs","tag-china","tag-public-debt","tag-zombie-companies"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/43521","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=43521"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/43521\/revisions"}],"predecessor-version":[{"id":43523,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/43521\/revisions\/43523"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=43521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=43521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=43521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}