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Yet another warning on the precarious state of the Chinese economy has been published, but this time it feels a little more serious – we may be in the process of seeing a crescendo of seriousness, as each successive report feels a little more worrying than the previous one. But there is also a fear that problems in China will spill over and hit us in the west, just as the subprime crisis in the US hit Europe in 2008.

Credit ratings agency, Fitch is the latest to warn about China. But then again, we need to put this in the context of a warning from the UN’s UNCTAD. But is it really so bad?

Fitch says bad debts percolating around the Chinese economy are ten times worse than official estimates suggest.

China’s debt has now hit 243% of GDP, but Fitch warns it is set to get even bigger, it may pass 269% of GDP before the end of this decade.

Attention is focused on the shadow banking system, said to be worth between 12% and 15% of China’s economy.

The real problem with China’s debt is not so much its scale, but the speed with which it has grown. According to a report from Capital Economics published a year or so ago, there has never been an occasion when private debt to GDP has risen by more than 40 percentage points in a ten-year period, and a banking crisis has not then followed. But in the ten years to 2015, China’s private debt to GDP had risen by 70 percentage points. Yet, this debt level has continued to rise since then, if anything, at an accelerating rate.

But before you conclude doom is inevitable, just bear in mind that China owes money to itself. The savings ratio is exceptionally high in China – it’s an over simplification, but debt is in effect the way savings are put to use – although the relationship is quite convoluted. The real problem in China is not so much the level of debt, but its quality.

Meanwhile, UNCTAD has warned that the global economy faces the very real prospect of entering the third stage in the finance crisis that begun in 2007/08. Stage one was US subprime, Phase two was the Eurozone crisis, and phase three may relate to debt levels in emerging markets – China in particular.

Actually, the solution is staring at us, it is called helicopter money, and for as long as global inflation is low there is no reason why not, other than fear of the unknown and political uneasiness.