"China’s debt is approaching critical levels and a crisis could unfold within a year, renowned investor Marc Faber told Citywire Global.
Rather than focusing on the spat between politicians over the US’s fiscal policies, people should be more concerned about developments in China, said Faber.
‘I am leaning towards the view that China is heading for a crisis. The question is whether they can postpone the problems with fiscal or monetary problems for a year or so,’ he said.
‘Maybe in China they can postpone a crisis for a while but when you look at the expansion of debt to GDP of 50% over the last couple of years, clearly that is not going to be sustainable for a long time.’
Faber estimates China to be growing at around 4% per annum, far below the 7.8% estimate of the Chinese authorities. If growth were to fall much below this, it would be more damaging to the global economy than the US government shutdown, he said."
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