The International Monetary Fund said in August that “international experience suggests that China’s credit growth is on a dangerous trajectory, with increasing risks of a disruptive adjustment and/or a marked growth slowdown.” The fund projected at the time that non-financial sector debt, which includes households, corporates and government debt is set to reach almost 300 percent of its GDP by 2022.
But according to O’Neill, the Chinese debt issue isn’t such a big problem, given that “it’s a country with an enormous amount of savings.”
Earlier on Tuesday, fresh data from China disappointed the markets, with retail sales and industrial production figures missing forecasts. However, O’Neill noted that during Singles Day, which took place last Friday, consumers broke all previous records and spent more than $25 billion.
“Certainly, I don’t think we have to worry about the Chinese consumer slowing down too much,” he said.
