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China's Debt Load Is (Much) Higher Than Previously Thought, Goldman Says

New credit creation points to an "uncomfortable" trend.
New Chinese 100-Yuan Banknotes As New Design Goes Into Circulation
Photographer: Xaume Olleros/Bloomberg

Count total social financing (TSF) as another Chinese statistic of increasingly dubious value, according to analysts at Goldman Sachs Group Inc.

With many investors grappling to understand the degree to which China's economic growth has been fueled by debt, efforts to get a grip on measures of new credit creation have gained fresh urgency. To date, many have relied on the TSF invented by the Chinese authorities in 2011 as a way of capturing a larger slice of the country's shadow banking activity, but Goldman analysts led by M.K. Tang cast fresh doubt, in a note published on Wednesday, on the measure's ability to gauge credit creation.