Goldman Sachs: China faces tough balancing act

China's growth has slowed but debt leverage continues to rise relative to GDP.

China faces slowing economic growth and rising debt. As such, Chinese policy makers are faced with a delicate challenge how to hold back credit growth without causing too much economic heartache.

“Growth has slowed but leverage, that is credit or debt, continues to rise relative to GDP,” Andrew Tilton, Goldman Sachs' chief Asia Pacific economist told reporters at a press briefing in Hong Kong on Tuesday. “The challenge facing policy makers is to slow down that growth in debt without slowing down GDP growth too much,” he added.

China's economic growth has been slowing thanks largely to weak export growth. Faced with their own problems since...

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