from King World News:
Eric King: “You brought up China. There has been a lot of talk about the shadow banking system, the leverage and the danger there. How big is the danger?”
Eveillard: “The thing about China is that the people who are in power, because they are not legitimate because of free elections, they are legitimate only to the extent that they continue to provide jobs to the masses of Chinese people who are leaving the rural areas and are moving into cities.
If they stop providing jobs, the so-called elites are in big trouble. So there is a fine line between them acknowledging, which I think they do to some extent, that there is just too much debt around in their country, and then wanting to continue to see the economy grow. So there is a temptation to stimulate, but if it’s a matter of continuing the credit boom and continuing the excesses of the credit boom, then that’s not good at some point down the road.”
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