Inflated Chinese business lending set to burst?

A hard landing could be on the horizon.

Well this isn't good. The Wall Street Journal has a story about the growing credit bubble in China. Dinny Mcmahon and Colum Murphy write:

Analysts at Standard Chartered PLC estimate that Chinese corporate debt was equivalent to 128% of gross domestic product by the end of 2012, up from 101% at the end of 2009. In a 2011 research paper, economists at the Bank for International Settlements found that when a country's corporate debt exceeds 90%, it becomes a drag on growth.

While accessible loans may be good news for China's struggling companies, it could be bad news down the road. Some economists worry such heavy debt in China's financial system could create serious problems for the economy if borrowers are unable to meet their obligations. Soured loans could ultimately force companies to consolidate—which could lead to politically unpalatable job losses—or force leaders into some sort of expensive bailout.

The news is yet more evidence that a significant proportion of China's growth could be illusory. Chinese infrastructure spending is notoriously wasteful, leading to the creation of ghost cities, collapsing bridges and impossible promises.

So much of the rest of the world's economy is based on Chinese growth remaining well about 5 per cent that the prospect of that not happening — a so-called "hard landing" — is usually held up as the third of the big economic disasters waiting to happen, after a US debt-ceiling default and a Eurozone breakup.

If the private economy is as unsustainably inflated as the state sector is, that hard landing is looking uncomfortably possible.

A Chinese labourer works at a saltern in Hami. Photograph: Getty

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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From "cockroaches" to campaigns: how the UK press u-turned on the refugee crisis

Harrowing photos of a drowned toddler washed up on a Turkish beach have made the front pages – and changed the attitude of Britain's newspapers.

Contains distressing images.

The UK press has united in urging the government to soften its stance on the record numbers of people migrating to Europe. The reason? A series of distressing photos of the body of a three-year-old Syrian boy, face down in the sand on the Turkish coast.

Most papers decided to run one or more of these pictures on their front pages, accompanying headlines entreating David Cameron to take notice. While your mole wholeheartedly supports this message, it can't help noticing the sudden u-turn executed by certain newspapers on the subject of the refugee crisis.

First, they used to call them "foreigners" and "migrants" (a term that has rapidly lost its neutrality in the reporting of the crisis) who were flooding Europe and on the way to "swarm" the UK. Now they've discovered that these people are victims and refugees who need saving.


 

Photos: Twitter/suttonnick


The Sun went so far as to run a column by Katie Hopkins five months ago in which she referred to them as "cockroaches" and "feral humans". She wrote:

Show me pictures of coffins, show me bodies floating in water, play violins and show me skinny people looking sad. I still don't care. Because in the next minute you'll show me pictures of aggressive young men at Calais, spreading like norovirus on a cruise ship. Make no mistake, these migrants are like cockroaches.

Photo: Twitter

Now the same paper is urging the government not to "flinch" from taking in "desperate people", those in a "life-and-death struggle not of their own making":

Photo: Twitter/@Yorkskillerby


And the Daily Mail still seems confused:

 

It's not really the time for media navel-gazing, but perhaps the papers that have only just realised the refugees' plight can look closer at the language they've been using. It may have contributed to the "dehumanising" effect for which Cameron and co are now being condemned.

I'm a mole, innit.