{"id":501,"date":"2012-08-01T14:07:48","date_gmt":"2012-08-01T13:07:48","guid":{"rendered":"http:\/\/blogg.lnu.se\/china-research\/?p=501"},"modified":"2012-08-02T15:02:52","modified_gmt":"2012-08-02T14:02:52","slug":"the-chinese-government-debt-%e2%80%93-a-future-threat-to-the-european-economy","status":"publish","type":"post","link":"https:\/\/blogg.lnu.se\/china-research\/?p=501","title":{"rendered":"The Chinese Government Debt \u2013 a Future Threat to the European Economy?"},"content":{"rendered":"

This is astonishing since the Chinese economy has by now climbed to the second position in global GDP ranking (total, in PPP terms). Thus, the development of China\u2019s government debt matters increasingly to Europe as well, both in a macroeconomic and an applied corporate perspective.<\/p>\n

Furthermore, not enough is known about the real size of the total Chinese government debt. Insufficient statistical transparency is an important reason for this shortcoming, but this should not serve as an excuse. Increasing efforts are needed to provide China and the rest of the world with better information on the real state of Chinese government debt. This need is underlined by a special survey with Linnaeus University\u2019s China Panel in March\/April 2012.<\/p>\n

In this paper, an attempt is made to explain and discuss\/roughly estimate the real situation when it comes to the Chinese government debt. The current Greek debt misery clearly shows that opaque statistics, even in small countries, cannot be hidden away forever without sooner or later puzzling and\/or frightening the financial markets. On the other hand, China cannot be analyzed completely with Western eyes.<\/p>\n

The sooner decision-makers decide on greater transparency in the total government debt situation, and decisive steps towards more efficient fiscal policy are taken, the better the consequences for China itself and for the European \/global economy. The alternative – continuous opaqueness and a possible future fiscal turmoil or explosion -could certainly do a lot of harm to the European and global economy. There is no reason to underestimate this medium and long-term risk coming from government debt. The short-term perspective looks safer.<\/p>\n

There should be room for a greater exchange of views and co-operation between EU and China, too. The EU\u2019s own bad experience from the past few years could be arealistic starting point.<\/p>\n

JEL Classifications: D 02, D 82, H 70, H 74, O 53, P 35<\/em><\/p>\n

Read the whole article<\/a><\/p>\n

 <\/p>\n

\"\"<\/p>\n

Hubert Fromlet<\/em><\/strong>
\n<\/em>Professor of International Economics
\nEditorial board<\/a><\/p>\n

Back to Start Page<\/a>
\n<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

This is astonishing since the Chinese economy has by now climbed to the second position in global GDP ranking (total, in PPP terms). Thus, the development of China\u2019s government debt matters increasingly to Europe as well, both in a macroeconomic and an applied corporate perspective. 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