China's Subprime Crisis Is Here
The nation's troubled debt has surpassed the size of the U.S. asset class that triggered the global financial crisis.
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Sorry, Kyle Bass, you're a bit late to the game. The debt problem in China has already reached the proportions of the U.S. subprime mortgage debacle. Don't worry, though: Chinese authorities are on the case -- discussing reducing the required coverage for bad loans so that banks can keep booking profits and lending.
Including ``special-mention" loans, which are those showing signs of future repayment risk, the industry’s total troubled advances swelled to 4.2 trillion yuan ($645 billion) as of December, representing 5.46 percent of total lending. That number is already higher than the $600 billion total subprime mortgages in the U.S. as of 2006, just before that asset class toppled the world into the worst financial crisis since 1929.