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>> Alarm bells are ringing ever louder over China's soaring debt. The world's top financing watchdog warning this week that lending stress in the country's massive banking sector is now more than three times above the danger level. That puts it in a different league from any other country tracked by the Bank for International Settlements.
It's also far higher than debt stress in the US, leading up to the 2008 financial crisis. I'm Reuters' Tara Joseph in Hong Kong. Outstanding loans in China have already totaled $28 trillion. That's more than the commercial banking systems of the United States and Japan combined. Analysts warn the scale of debt could trigger a worldwide economic shock.
But so far Beijing has only made scant efforts to reign back lending. Huge building projects dominate the skylines of major Chinese cities and construction isn't showing signs of slowing down. Mortgages are the main driver of China's loan growth making up nearly three quarters of all bank lending. And data this week shows housing prices are surging across the country.
Like in the southern city of Shenzhen, where they rose by nearly 35% in July alone. For years, China has been pledging to march toward a market economy. But that transition has been filled with challenges and pitfalls. All of the country's major banks are owned by the state. The largest lender ICBC has a market value of more than $225 billion.
But like all the others, it's bad loan ratios are broadly rising and as the economy slows, solutions seem ever harder to find.