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China’s Corporate-Debt Challenge

Next month, when China hosts the G20 meeting in Hangzhou, its voice will be one of the loudest calling for structural reforms to stimulate growth in advanced and emerging-market economies. But China faces its own hazards: above all, domestic credit is expanding at an unsustainable pace, with corporate debt reaching dangerous levels.

WASHINGTON, DC – The Chinese economy has slowed in recent years, but it is still a strong performer, contributing about one-third of total economic growth worldwide. It is also becoming more sustainable, in line with the shift in its growth model away from investment and exports and toward domestic demand and services.