Credit growth in China is causing jitters
But it’s wrong to assume that reining it in will slow down the economy
“COASTER through the Clouds” in Nanchang, a city in the southern province of Jiangxi, is China’s tallest and fastest rollercoaster (see picture). It carries terrified customers up to heights of 78 metres and down again at speeds reaching 130kph. The ride towers above an amusement park built by Dalian Wanda, a Chinese property-and-entertainment conglomerate, which has aspired to outdo Disney’s resort in Shanghai.
But this month the group said it was selling 13 such projects and 77 hotels to rival developers. It would use the proceeds, its owner said, to repay loans. Last month China’s regulator asked banks to provide more details about their overseas loans to Wanda. Standard & Poor’s said it would reassess the group’s credit rating, noting that the abrupt sale of assets had raised questions about Wanda’s strategy and finances.
This article appeared in the China section of the print edition under the headline "The debt rollercoaster"
From the July 22nd 2017 edition
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