China’s impending Minsky moment

Monday, January 6, 2020

Two years ago, Zhou Xiaochuan, then China’s central bank governor, ​told a press conference at the 19th Communist party Congress in Beijing ​that too many procyclical factors in the economy and excessive optimism risked generating “accumulating contradictions that could lead to the so-called Minsky moment”.

There is still a danger of a “Minsky moment” hitting China’s economy. US academic economist Hyman Minsky, who died in 1996, warned of the risks of periods of financial excesses leading to​ ​crises. Today, China’s debt-to-gross domestic product ratio is more than 300 per cent and continues on a dangerously upward trajectory.

This op-ed was originally published on December 29, 2019 in the Financial Times. Read the full article here.

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