Debt and Distortion (PDF)

China's unprecedented growth has
transformed the lives of its people and impacted economies across the globe. The
financial system supported this growth by providing cheap loans to boost
investment and, in a virtuous cycle, rapid growth insured that these loans
could be repaid. However, in recent years, this virtuous cycle has turned
vicious. The financial system has continued to lend freely and cheaply as the
economy has slowed, and the risk of crisis has mounted. In response, the
government has initiated the most ambitious financial reforms in twenty years. Financial
markets, businesses and governments are concerned about these risks and are
struggling to understand what the reforms will mean for China and the rest of
the world.

Debt
and Distortion: Risks and Reforms in the Chinese Financial System addresses the need for an up-to-date and accessible, yet
comprehensive analysis of China's financial system and related reforms. It will
take a systematic look at China'sfinancial system: how it worked in the past
and how it will work in the future; why reforms are needed; what risks they
bring; and their impact on China and the rest of the world. By analyzing the
topic in terms of a few fundamental distortions, this book makes an otherwise
complex topic accessible while simultaneously providing new insights. These
distortions provide a simple framework for understanding the nature of the
Chinese financial system and its future prospects.

Reform in China will transform the world's
second largest economy and impact everything from Peruvian copper mines to the
London housing market. Business people, government officials, financiers and
informed citizens would all benefit from understanding how changes in China's
financial system will shape the global economy in the coming decades.