China’s current credit trajectory is ‘dangerous’, IMF warns

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Deleveraging has been one of the most important focuses of China's government this year

The International Monetary Fund has warned China’s current credit trajectory is “dangerous”, with “increasing risks of a “disruptive adjustment”.

In a report published on August 15, the IMF says that according to the international experience of credit booms, China’s current credit trajectory is “dangerous, with increasing risks of a disruptive adjustment and/or a marked growth slowdown”.

The fund studied 43 cases of previous credit booms, finding that only five ended without a major growth

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