Salient to Investors:

William Pesek writes:

The economic challenges China faced in 1998 are eerily similar to those it faces today. Now, as then, economists worry China’s economy might collapse, a mountain of nonperforming loans might go bad, state-owned enterprises are stifling innovation, and social unrest might overwhelm Beijing.

The world tends to obsess over the wrong metrics. China may be the second-biggest economy but over the last 10 years it has regressed as the state companies used cheap capital to expand their grip and now impose a significant drag on growth. Vested interests have grown as rapidly as debt over the last 15 years.

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