China wrestles with growing debt crisis

is to pump even more credit into its economy in a bid to boost growth despite fears of a massive build-up of debt.

Over the weekend, the country’s central bank moved to lower the amount of cash commercial lenders are required to keep in reserve, allowing banks to dish out an estimated £100bn in additional lending.

Despite China’s ballooning mountain of debt and the decision by credit rating agency Standard & Poors to downgrade China one notch over fears that that strong credit growth was increasing economic and financial risks, Chinese authorities have pushed ahead with plans to bolster small businesses and farmers.

“Financing for smaller firms is a concern in an economy where bloated state-owned companies gobble up a lot of the credit”, says CNN.



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