Could China debt pile be the next trigger for global markets?

Even as market participants in India are still digesting the recent Fed's decision on policy rates  & our own RBI's policy rate decision while trying to speculate on the possibilities of BREXIT and its would be impact on Indian markets, the piling debt in China could catch the bears attention in global equity markets, which will affect Indian equities as well.

The concerns about China have not gone away even as China's economic slowdown has  created turmoil in global financial markets during this year. Senior bankers raised alarm on Thursday at St. Petersburg International Economic Forum (SPIEF ) in Russia on rising debt levels in Chinese economy, which could pose threat to the World Economy.

In what may come as a surprise to many, China's total debt reached a record 237 per cent of its gross domestic product (GDP) in the Q1 FY16. The debt level was at 148 per cent of GDP at the end of 2007 according to Financial Times. 

Panellists shared the concern on rising debt levels globally, while highlighting that debt accumulation for European economies in cyclical slowdown may be good, but it may be hazardous for emerging economies like China and Russia.

Few panellists argued that the rising debt levels in China could pose as the biggest risk to world economy, while some believed it is the US economy debt levels that pose as the highest risk factor to the world economy. 

Traders and investors may well be advised to keep a close tab on debt levels in the Chinese economy along with other global factors