Yu Yongding, an economist at the Chinese Academy of Social Sciences (former member of the Monetary Policy Committee of the People’s Bank of China and President of the China Society of World Economics):
- Says the complexity and distinctiveness of China’s economy meant gloomy predictions were pointless, and that they have repeatedly emerged in the past 30 years but never came true
- Yu also dismissed concerns over the country’s high leverage ratio and property bubble
- China’s high leverage ratio should be interpreted with other detailed factors taken into account: One of the factors that can not be ignored is China’s much higher saving rate. “The higher the saving rate, the less likely it is that a high debt to GDP ratio will trigger a financial crisis”. In fact, the high ratio is mostly a result of the simultaneously high saving and investment rates, and the non-performing loan ratio of the country’s major banks remained lower than 1 percent
- Dismissed China’s real-estate price bubble as a catalyst for a crisis, as the country has no sub-prime mortgages and the down payment to buy a home exceeds 50 percent: “Given that property prices are unlikely to fall by such a large margin, the bubble’s collapse would not bring down China’s banks”
- Housing demand remained strong boosted by the country’s urbanization progress, as data from the statistics authorities showed 56 of 70 major Chinese cities saw month-on-month gains in new home prices in March.
More at Xinhua: China economy collapse theory fear-mongering: economist
