But China’s investment boom has coincided with a rapid build-up of debt. Staggering developmental projects have oed the government to conclude that recovery from extreme debts would not happen ‘overnight’. As the bulk of listed company assets are controlled or owned by state entities, state firms continue to account for the lion’s share of overall leverage. Private firms do nof stand very far away in leverage contribution too. ‘The key is to address the excessive corporate leverage ratio’, As Zhou Xiaochuan has emphasised over and over again in the last few years. Should China not process a huge economic deleverage on a fast pace, a vague possibility of an economic collapse is surely in sight for the country.
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