Growth In Emerging Markets Generally Declined

Wall Street has seen more than one mention of China's debt problem. In recent decades, massive borrowing and borrowing is a global problem. However, with the general decline in the growth of emerging market economies, high debt poses a greater threat.

The picture below shows the growth of non-financial credit and GDP growth in the United States, Japan, China, the United Kingdom, the euro area and Brazil respectively.

As shown here, the credit scale of these countries is generally larger than that of GDP, and after twenty-first Century, the credit growth rate is obviously more than GDP.

The most obvious difference between credit and GDP in recent ten years is China and Brazil.

This month's Wall Street news article mentioned that Citigroup's "world credit has reached its limit," the report points out that credit expansion has injected a lot of liquidity to the market, especially for emerging markets, including China, making them the engine of stimulating economic growth in the early stage of the financial crisis.

But the credit expansion of emerging markets has come to an end, leading to unprecedented commodity overflows and "empty city ghosts", and the world's most dangerous credit bubble, which many people believe.

The report believes that the central bank credit expansion has reached the edge of elasticity, that is to say, the total overdraft of all countries is increasing.

As a result, new credit in emerging markets is no longer pushing.

Instead, it pushes asset price inflation up in the west, for example, the real estate and stock market.

This month's Wall Street article said that Citigroup's "world credit has reached its limit," the report points out that credit expansion has injected a lot of money into the market.

In particular, the emerging markets, including China, made them the engines of global economic growth at the beginning of the financial crisis.

But the credit expansion of emerging markets has come to an end, leading to unprecedented commodity overflows and "empty city ghosts", and the world's most dangerous credit bubble, which many people believe.

Last week, Harvard University professor Carmen Reinhart warned in the article.

There may be a sign of crisis that is difficult to monitor and measure - hidden high debt.

During the boom period of infrastructure boom, China provided financing for major mining projects such as mining and energy in other emerging market countries.

These debts are basically priced in US dollars, many of which are derived from China's policy banks, not in the statistics of the BIS and the world bank.

The debt of emerging economies is likely to be undervalued, and the capital outflow of their experience may be more serious than is generally expected.