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Chinese companies like borrowing money a
lot and now that may be getting them
into trouble which could mean trouble
for the rest of us too Chinese companies
oh the biggest pile of corporate debt in
the world by far about eighteen trillion
US dollars or a hundred and seventy
percent of gross domestic product in the
first three months of 2017 companies
defaulted on nine of the bonds they have
issued not a big number but a record for
the first quarter the danger is that as
Beijing tries to pare back credit growth
in the economy many companies will
become unable to honor bond payments or
repay bank loans this frailty is already
causing ripples in a skittish Hong Kong
stock market wash and dairy a Chinese
company that was late on loan payments
had 4.1 billion US dollars wiped off its
market capitalization in March a debt
crisis in China would certainly shake
the global economy Chinese companies
which are financing themselves from
precariously leveraged balance sheets
are acquiring firms in Europe the US and
elsewhere will boom turn to bust in
China some Chinese companies are now
defaulting on their bonds if the number
continues to grow it's time to worry