"Borrow New and Repay Old" or "Deleveraging"
After many years of managing an economy fundamentally driven by credit-fuelled investment, exports, construction of infrastructure and real estate, China's authorities have decided to transform their investment-propelled economy into a consumption-driven one, as well as to start deleveraging banks in order to avoid a credit crisis that could substantially imperil their economic and financial future.
Although anyone who comes across this website and has a quick glance at the debt chart below could instantaneously conclude that the PBoC doesn’t have a clue about risk management, he or she would be wrong.
And if that person believes in what I said just because it’s on the internet, then he or she would be doubly wrong.
Keep reading and you’ll find out ;)