While investors around the world remain fixated on the rampant fiscal and economic problems of the United States and Europe it turns out China, the country the rest of the world is depending on to drive growth, has some serious debt problems of its own.
Benjamin Tal, deputy chief economist with CIBC World Markets, said the debt-to-GDP ratio for China may be north of 50% – almost double the official figures – once the off-balance-sheet debt of local governments is taken into account.
“Some provinces in China sit on debt ratios that make Greece look good,” he said.
