Asian Credit Monitor: China - The Detrimental Debt Denotation
in Thematic & Strategy
Once and for all, we would like to break the ice on China's debt debacle. China's macro data has recently improved. Many sellside economists have called the event a turning point and expect RMB to at least stop depreciating.
In one of the recent sellside presentations that we had attended, we asked if they were confident with the data integrity and the presenters did not seem to be very happy with our question. They are correct except the fact that they made a call based on the official data! China's data is a far cry from a developed market standard and we believe the country's credit risk has not receded. In fact, we believe it is heading for the detonation unless China's foreign exchange reserves improve within the next 2 years.
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