Debt Reduction Measures Threaten GDP Growth
June 6, 2018
*Beijing’s efforts to tackle the large volume of corporate debt is likely to reduce China’s economic growth by more than 1% per year.* Global rating agency Fitch Ratings says that _governmental efforts to reduce borrowing levels will bring GDP growth down to about 4.5% – far below the official target of 6.5%_. “China’s corporate debt challenges remain a key downside risk to medium-term growth…investment needs to slow sharply to reduce corporate borrowing. Such an adjustment would take a big toll on GDP growth, given that business investment is equal to a quarter of GDP,” states Fitch Ratings Chief Economist Brian Coulton.