The belief in an “implicit guarantee” from the Chinese government on debt is a big problem, said a finance professor on Monday.
“I’m concerned with what a lot of people believe, [that] the government is going to take care of investment losses. Under that impression, they are going to take up lot of leverage because they believe they will be bailed out if something does not work out,” said Zhu Ning, a professor of finance at Tsinghua University in Beijing.
China has been battling high debt levels for years, but debt-to-GDP ratio is still about 260 percent, according to the Bank of International …
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