Financial crisis may threaten China, Deutsche Bank analyst says

Almaty. December 13. Silkroadnews - China may face a financial crisis, Deutsche Bank analyst says, The Economic Times reports.
“The probability of a financial crisis starting in China is almost twice as high as in any other major global economy, according to new research from analysts at Deutsche Bank. Writing in a note titled “How much risk in China?” – Deutsche Bank’s chief economist for the Asia Pacific region, Dr Michael Spencer, warned that the probability of a crisis in the world’s second largest economy was as much as 13 per cent,” the report said.
According to Spencer, “nearly twice the probability of a crisis in the next riskiest country and nearly three times the probability of a crisis in any random country at any random point in time.”
Concerns by Deutsche Bank focused on the growth of indebtedness in the country.
“The stock of debt owed by all nonfinancial borrowers rose by 36% of GDP in 2009 alone. An easy monetary policy stance since 2013 has seen indebtedness rise steadily, with total nonfinancial sector borrowing reaching 255% of GDP at the end of last year,” Spencer wrote.
Now China can become the largest economy with the greatest threat of a financial crisis, but Spencer noted that the probability of a crisis “is well below the probabilities calculated for some countries prior to the peripheral European debt crisis or the Asian financial crisis in the late 1990s.”
Reportedly, despite Spencer’s relative optimism about China, his warnings coincide with warnings by the International Monetary Fund, which says of the numerous threats that China’s debts pose not only to its own economy, but also the global financial system.