First published: Financial Times, 03/07/2013
From Mr George Magnus.
Sir, As Martin Wolf points out, the danger that China’s economic rebalancing may spin out of control has been increasing (“Risks of a hard landing for China”, July 3). His economic reasoning is solid, as he runs through the inevitable downside risks to investment in both inventories and fixed investment, profits, and bank balance sheets. In the transition to permanently lower growth, a significant amount of the elevated level of corporate debt will doubtless become more visibly impaired, a development that is already occurring in local government entities…..more
