Not only the US, but China is gearing up to welcome a new President, in its case Xi Jinping. That’s not the only similarity between the two global powers. While nothing can beat America’s critical levels of debt (watch the media leap like lemmings over the term ‘fiscal cliff‘), the Middle Kingdom isn’t doing too shabbily at clocking up credit of is own.
It’s a bit of a myth that Easterners love to save, as a report today from Standard Chartered shows. The explosion of a middle class means consumers want their shiny goods, and they want them now. China’s new leader will inherit an economy that’s 30 per cent more leveraged than the one his predecessor Hu Jintao took over in 2002.
Furthermore, China’s total leverage (in other words, borrowing) will rise from 191 per cent of GDP at the end of 2011 to 206 per cent by the time this year is over, according to Standard Chartered calculations.
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