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Weekly Debate: The Cause Of China’s Next Hurdle

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Editor’s remarks:

For many years the Chinese government was accused of artificially lowering its currency and therefore allowed it to appreciate against the US dollar. However, last year, with the slowdown in its economy becoming more apparent, the government made a devaluation adjustment to the currency that severely impacted global economies. Over the course of 2016, the currency has continued to devalue versus the US dollar and the government has been more open about its policies, but there is still lingering uncertainties over exchange rates. Another major issue is the enormous debt that has accumulated which many expect to continue to rise. Although the government has maintained massive reserves, the mountain of debt could become unmanageable. No doubt, with growth expected to slow, the hurdles for the Chinese government will continue to line up.

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