China's Subprime Crisis Is Here
This doesn&#x27;t seem like a particularly compelling argument. Bad loan volumes have risen, but not above historical highs.<p>As a percentage of total debt, the article says bad debt is at 1.67%. This is up 51% from 1.25% in the last year. Considering the amount of margin that&#x27;s been wiped out as a result of the stock bubble popping, this doesn&#x27;t seem terrible. In addition, it doesn&#x27;t seem like this rate is accelerating (since 2009), but linearly increasing.<p>Maybe Chinese banks are consistently increasing the amount of debt they issue and the risk they take per unit debt as a rational response to increasing productivity of Chinese businesses. This implies a greater amount of leverage for the Chinese economy, but not necessarily extreme irrationality.<p>Maybe there&#x27;s something here (I actually think there are structural problems in the Chinese economy) but this article does not make a compelling case.