China: Are there reasons to be optimistic despite debt burden and Trump threat?

Year of the rooster

Investing in China is "not for the faint-hearted", according to industry commentators, as the country's growing debt burden is set to become a threat to its economic growth over the next couple of years.

China's government debt rose from 160% of GDP in 2005 to 277% at the end of 2016. Meanwhile, its private sector debt ratio is at an historic peak of 209%. This has led to warnings China's growth will slow in the coming years, most recently from ratings agency Fitch Ratings, which predicts GDP growth will fall back from 6.7% in 2016 to 6.4% this year, and 5.7% in 2018. The agency said: "The rapid increase in credit required to keep GDP growing at its current rate strongly suggests that a sustainable rate of medium-term economic growth - in which leverage and broader imbalances stabilis...