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China's Looming Financial Crisis
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China faces a looming financial crisis due to a hidden debt problem of USD 7-11 trillion in the banking system, with local governments accumulating undisclosed debt. The Chinese authorities are addressing this by replacing some hidden debt with new, explicit government debt. Moody’s Investors Service recently lowered China’s credit rating to negative due to increased support for financially stressed local governments and state-owned enterprises.
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How does China's credit rating downgrade by Moody’s Investors Service affect investor confidence in the country's economic stability?
How might China's financial crisis impact its global economic standing and trade relationships?
What measures could China implement to address the hidden debt problem and prevent defaults?
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