Dual Risk Out Of China

  • The largely state-owned industrial sector is plagued by overcapacity, large debt, deflation and declining credit quality.
  • The Chinese authorities have three ways of dealing with this, restructuring, devaluation, or stimulus.
  • They seem to have chosen the path of least resistance; while this is good news in the very short run, it only increases the risks in the near future.

Dual Risk Out Of China | Seeking Alpha