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China Needs to Act on $33 Trillion of Credit, Analyst Chu Says

  • Outstanding credit to grow 13% in 2017, Charlene Chu says
  • Analyst at Autonomous well known for warnings on China debt
Pedestrians cross a road in front of a tram in the central business district of Hong Kong, China, on Thursday, July 9, 2015. After tumbling the most since the financial crisis on July 8 amid a record surge in volatility, the Hang Seng Index rebounded Thursday to its biggest gain in three months.
Photographer: Jerome Favre/Bloomberg

China has made progress in slowing leverage in the economy, but still needs to do more with the total amount of financing expected to rise 13 percent this year, according to Autonomous Research analyst Charlene Chu.

Total outstanding credit is expected to grow to 223 trillion yuan ($33 trillion) by December from 196.8 trillion yuan at the end of 2016, analysis by Chu shows. The estimated increase will be lower than last year’s 19 percent gain as the government’s campaign against leverage starts to bite, she said.