>> Steady growth on the surface. China posting a 6.7% rise for third quarter GDP on Wednesday. In line with government goals and investor expectations. But it's what lies beneath that number that's cause for concern. I'm Reuters Tara Joseph in Hong Kong. Despite increasing signs that China's economy is gradually stabilizing, two disturbing signs are lurking in a very visible way.
First, a property bubble that's looking very frothy and increasingly volatile. Second, soaring levels of debt being racked up by both banks and corporations. Urban home prices have skyrocketed in China over the past year, forcing Beijing to step in with buying restrictions to prevent the bubble from bursting. Property makes up around 15% of the country's GDP.
And analysts fear that a major correction could pose a serious risk to the economy. A housing boom may be good for growth, but it's also a big part of China's whopping debt problem. Companies are sitting on $18 trillion worth of loans which Beijing knows it needs to cut.
But that will almost certainly mean slower economic activity at least for awhile. On the factory floors, China's also at odds with painful reforms, like slashing overcapacity in massive state-owned enterprises, making layoffs, and debt defaults a worrying reality. 6% plus may still be an enviable GDP figure by most countries' standards, but behind practically every force propping up Chinese growth, problems and challenges are piling up and threatening a fragile economy.