China warning: Economy set for financial MELTDOWN amid soaring debt levels
CHINA is on course for a full-scale financial meltdown that could cause havoc across the globe, suggest early warning indicators tracked by the world's central bank watchdog.
The seeds have been sowed for potential financial distress in the world's second-largest economy, according to the Bank for International Settlements(BIS).
Soaring credit growth relative to China's GDP is a huge cause for concern that could result in financial overheating and distress, warned the organisation - thought of as the central bank of the world's central banks.
Any score above 10 is a worry but China's gap is measured at a huge 30.1 - higher than even the US before the financial crisis.
By comparison the debt-laden countries of Greece and Italy score -13.2 and -13.7 respectively.
The measure stands at -27.0 in Britain.
The debt service ratio in China, which monitors income with interest payments are also a concern, BIS data showed.
Fears over China's debts coupled with its slowing economy, triggered a huge stock market crash at the start of the 2016 and during the summer of 2015.
Experts raised the alarm in July after a slew of worrying economic data was released by China.
Moon on the loose in China
Imports and exports came in below expectations, while growth in fixed asset investment in the January to July period also missed forecasts and slipped to the lowest year-to-date rate in more than 16 years.
Yet market have been preoccupied with impact of Britain's vote to leave the European Union, as well as US interest rate movements.
But critics believe China could spark a meltdown akin to that seen at the start of the year and last summer.