Chinese Corporate Leverage Soars [CHART]

Chinese Corporate Leverage Soars [CHART]

This post first appeared on Floating Path.

The Chinese business boom has brought with it a substantially more leveraged economy than existed just a few years ago. The below chart from Goldman Sachs Group Inc (NYSE:GS) lists the nations with the greatest 5-year change in debt-to-GDP from 2007-2012, and China ranks behind only Japan.

Unlike other nations on this list though, China’s debt has largely been fueled by corporations. Total debt-to-GDP has increased 56% over just those 5 years.

Ben Graham Lecture Notes

The Intelligent Investor - Benjamin GrahamI recently stumbled across two precious resources about the Godfather of value investing, Ben Graham. The first resource is a collection of notes from Benjamin Graham’s lectures when he was a professor at Columbia University. The notes were taken during lectures given in 1946, six years after the 1940 version of "Security Analysis" was published. Read More

Debt composition in the U.S. has almost moved in the opposite direction of China. The total debt ratio has increased, but in the U.S. it is fueled almost entirely by government debt while households have significantly delevered.

Chinese Corporate Leverage Soars [CHART]

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