Minsky Moment Alarm Sounded in China by SocGen: Cutting Research

China may be approaching a “Minsky moment” -- a sudden fall in asset values bloated by credit.

Credit growth in the world’s most populous country has outstripped economic expansion for five quarters, raising the question of where the money has gone, Societe Generale SA economist Yao Wei wrote in two recent reports. In the first quarter, for example, bank loans, shadow banking credit and corporate bonds together accelerated more than 20 percent year-over-year, while gross domestic product grew less than half that much. The gap has been widening since early 2012.