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Opinion
Christopher Balding

How Bad Is China's Debt Problem, Really?

A new reform plan ignores the scale of the problem.
Say hello ... to years of painful restructuring!

Say hello ... to years of painful restructuring!

Photographer: Mark Ralston/AFP

For months now, China's regulators have been warning about the dangers of rapidly expanding credit and the need to deleverage. With new plans to clean up bad loans at the country's banks, you might conclude that the government is getting serious about the risks it faces.

But there's reason to doubt the effectiveness of China's approach. In fact, it's running a serious risk of making its debt problems worse.