The Next Economic Disaster 2015: China's Economy Is Headed For Collapse

Resistor just a couple more slides i have right turn the volume up girl and that is the current situation in china runaway debt growth in china is alarming levels do you see the history back to 97 what we suggested is there a growth rate of 20 percent or more in a five year period is 10 of brain cancer growth rate in china inn by the way the numbers are lopez in you get slightly contradictory numbers from different sources of nowhere woodlands you rely on you looking at growth rates that in excess of 40 to 50 percent no where is the show up i think probably everybody in this room has read a lot about the problems in china associated with over capacity there are many cities that they are referring to as
ghost cities in a virtually empty cities of glee new buildings we also see a lot of reports about excess capacity in manufacturing um its capacity that's being added to keep the chinese economy growing that is not justified by the man in his increase is in is the resulting in increased levels of over capacity so what is a review of what's gonna happen in china well with ak crags is possible in 23 years now the mirror gants are very important focus on china has only about 32 percent central government debt to gdp low by royal standard errors about a hundred percent of japan is about 200 percent do they have a lot of additional borrowing capacity they are also through the pboc and other places holders of vast synonym for assets in both cases the capacity is the estimated yearly equal to 20 to 30 percent of gdp so china does have capacity to deal with this problem in an essay crisis avoided china has significant increase in levels of overcapacity netgear the little paradox for you know that china release the gdp number here at less than a week ago and it was 7 and a half percent everybody was relieved all my goodness that's great news there still growing at 7 in app that we don't need to worry gdp growth is more a measure of the capacity being added then it is a measure of the capacity that need it ios 7 and a half percent growth in china's economy is just evidence of the problem is compounded chinese deported back on the growth rate just to absorb the excess capacity they re air are we believed china situation maybe very similar to the one that we see we have seen in japan japan had this exactly to a rabbit run up and private debt leaving the 91 in 20 day 3 day 24 years of sideways growth in the period after that you can see something like that being the case for china once they come to grips with their problems are view it as what they will do and what they should do is act notice iteration unlike united states with the government affect owns the banks so they're there of mandate for keeping the banks alive is is different in in franklin were compelling that was a nice day photography them know and that's where they probably have to look at expanded safety net programme to do with the social ramifications of slower growth we think in aggregate the cast of the chinese economy could be 20 to 40 percent of gdp so with that help land rover insurance