Yu Yongding writes: \u00a0Earlier this year, rumors of China\u2019s impending financial doom \u2013 triggered by either a housing-market crash or local-government debt defaults \u2013 were rampant. But, in recent months, the economy has stabilized, leaving few doubts about China\u2019s ability to grow by more than 7% this year. Given that the Chinese government had ample scope for policy intervention, this turnaround should come as no surprise. But the moment of financial reckoning has merely been postponed, not averted.<\/p>\n
The fundamental problems that triggered alarm bells in the first place \u2013 including real-estate bubbles, local-government debt, rapid growth in shadow-banking activity, and rising corporate leverage ratios \u2013 remain unresolved. Of these, the most immediate threat to China\u2019s economic and financial stability is the combination of high borrowing costs, low profitability for nonfinancial corporations, and very high corporate leverage ratios. \u00a0\u00a0Waiting for market-oriented reform in China<\/a><\/strong><\/p>\n Yu Yongding writes: \u00a0Earlier this year, rumors of China\u2019s impending financial doom \u2013 triggered by either a housing-market crash or local-government debt defaults \u2013 were rampant. But, in recent months, the economy has stabilized, leaving few doubts about China\u2019s ability … Continue reading ![\"China's](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2014\/08\/Chinas-finances-300x170.jpg\")
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