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China's debt problems will outlast Xi Jinping

Real deleveraging requires greater role for market forces

| China
Unlike 20 years ago, China can no longer count on breakneck economic growth to support mounting debt.   © Reuters

Chinese Communist Party chief Xi Jinping is likely to emerge stronger than ever from this month's party congress, with all the authority he needs to rein in galloping debt and reform lumbering state-owned entities.

Xi's belated recognition of the dangerous buildup of debt is welcome, but his administration is still largely sweeping the problem under the carpet. By doing so, it is perpetuating the risk of financial instability and diminishing China's chances of embarking on a path of sustainable growth.

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