Everyone should worry about China debt, says BlackRock Inc’s Laurence D Fink

HING KONG: BlackRock Inc’s Laurence D Fink, who oversees the world’s largest money manager with $4.7 trillion of client assets, said “we all have to be worried” about China’s mounting debt amid slowing growth, even as he remains bullish on the economy in the long run.

“You can’t grow at 6% and have your balance sheets grow faster,” Fink said in a Bloomberg Television interview on the sidelines of a forum in Hong Kong on Tuesday. “In the future, I would prefer seeing the economy growing 6% with some form of deleveraging.”

China, whose surprise August yuan devaluation sent shock waves worldwide, is dividing the biggest names in finance more than any other market. While Fink said in April that investors would regret not betting on China this year because government stimulus may result in higher economic growth than many expect, billionaire investor George Soros said last month the nation’s debt-fueled economy resembles the US in 2007 and 2008, at the onset of the global financial crisis.

New credit in China increased a record 4.6 trillion yuan ($706 billion) in the first quarter, surpassing the level of 2009 during the depths of the global financial crisis.