The Chinese Debt Crisis – Domino Effect On Latin America

China today is much more than South America’s second largest customer. China is the largest source of soft loans to these governments. With growth slowing, skyrocketing municipal debt will soon lead to a fiscal crisis. On December 30th 2013, a long awaited report published by China’s National Audit Office confirmed the fears of many – municipal debt levels had soared, to $3 trillion, or 30 percent of GDP. For decades, China’s communist party has rewarded municipal leaders who delivered growth and job creation and allowed state-run banks to lend at artificially low rates. The municipal spending spree grew to feverish […]