# Chinese Debt Crisis Looming?

**URL:** <https://boards.straightdope.com/t/chinese-debt-crisis-looming/661903>\
**Category:** Great Debates\
**Created:** [June 25, 2013, 7:24pm UTC](https://boards.straightdope.com/t/chinese-debt-crisis-looming/661903 "2013-06-25T19:24:14Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![Ryan\_Liam](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ryan_liam/32/3965_2.png) [@Ryan\_Liam](https://boards.straightdope.com/u/Ryan_Liam)\
**Post date:** [June 25, 2013, 7:24pm UTC](https://boards.straightdope.com/t/chinese-debt-crisis-looming/661903/1 "2013-06-25T19:24:14Z")

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I’ve been hearing as of late of a big credit crisis coming due to under-performing loans, property speculation and wealth transfers out of China.

What’s going on in China, it’s not another Greece style debt crisis in the making, is it?

Here are some links

> **[Fitch says China credit bubble unprecedented in modern world history](https://www.telegraph.co.uk/finance/china-business/10123507/Fitch-says-China-credit-bubble-unprecedented-in-modern-world-history.html)**
>
> China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned.

> **[China debt-crisis fears focus on ‘shadow banks’](https://www.marketwatch.com/story/china-debt-crisis-fears-focus-on-shadow-banks-2013-06-25?link=MW_latest_news)**
>
> China’s shadow banks are at the center of mounting concerns over whether the country’s slowing economy could trigger a debt crisis.

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**Author:** ![lisiate](https://avatars.discourse-cdn.com/v4/letter/l/f05b48/32.png) [@lisiate](https://boards.straightdope.com/u/lisiate)\
**Post date:** [June 25, 2013, 10:44pm UTC](https://boards.straightdope.com/t/chinese-debt-crisis-looming/661903/2 "2013-06-25T22:44:40Z")

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My (admittedly limited) understanding is the Chinese Central Bank was concerned with the high amount of debt in the system and essentially shut off its [borrowing to banks.](http://www.nytimes.com/2013/06/21/business/global/china-manufacturing-contracts-to-lowest-level-in-9-months.html?pagewanted=all&_r=1&). Essentially deliberately creating a Lehman type event to signal to Chinese financial institutions that they need to ease back on the credit creation that was going on. I don’t think the Chinese state is particularly concerned about financial institutions going to the wall, so we won’t see the same sort of bailouts that happened in Europe and the US.