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Debts: China

Treasury written question – answered on 13th February 2020.

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Photo of John Spellar John Spellar Labour, Warley

To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential effect of trends in the level of debt in China on the world financial system.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

As highlighted by several institutions, including the International Monetary Fund, there are material risks associated with indebtedness in China.

The Financial Policy Committee of the Bank of England, which is responsible for monitoring risks to financial stability in the UK, reflected the risk of a severe recession in China, which would encompass factors such as its debt levels, in its 2019 stress tests of UK banks. The FPC concluded that the UK banking system would be resilient to this risk.

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