China sits on financial house of cards – OECD
China sits on financial house of cards – OECD https://www.rt.com/business/381608-china-economy-financial-risks/
“After decades of breath-taking expansion, the focus should be on making growth more resilient, sustainable and inclusive, and addressing risks to stability,” said OECD Secretary-General Angel Gurria.
“Soaring property prices in the largest cities and leveraged investment in asset markets magnify vulnerability and the risk of disorderly defaults,” said the report. “Excessive leverage and mounting debt in the corporate sector compound financial stability problems, even though a number of tax cuts are being implemented to reduce the burden on enterprises.”
The world’s second-largest economy needs more innovation, entrepreneurship, effective corporate governance and reform of its state-owned sector, according to the OECD.
“China’s economy should now be driven less by physical investment and more by innovation, it should deleverage, and it should, above all, become greener,” said Gurria.