Is China's Economy On The Verge Of Imploding?

Analyst Says China's Credit Bubble Is Unlike Anything In Modern History -- Ambrose Evans-Pritchard, Business Insider/The Daily Telegraph

China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned.

The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times ahead.

"The credit-driven growth model is clearly falling apart. This could feed into a massive over-capacity problem, and potentially into a Japanese-style deflation," said Charlene Chu, the agency's senior director in Beijing.

Read more ....

Update #1: China: Massive Credit Bubble Fueled By Shadow Banking And Securitization Could Collapse Banks -- Agustino Fontevecchia, Forbes
Update #2: China Credit-Bubble Call Pits Fitch’s Chu Against S&P -- Bloomberg
Update #3: Yes, At Some Point China Will Implode -- Henry Blodget, Business Insider

My Comment: As a China watcher and one who has done business in China .... I have always been aware of how out of control China's banking and lending system has been .... and I have always predicted that this growth is not sustainable. The key question has always been the following .... when will this bubble burst?

For the moment .... no one knows for sure, but as the above Telegraph commentary reveals .... more and more people are now starting to ask the "bubble question" that most Chinese are refusing to even acknowledge.

As to what is my prediction on when that bubble will burst .... I give it a few more years. The Chinese economy is still on a growth path, and China's growing middle class will fuel demand when all other markets are in a downturn .... at least for now.