Half a century ago, Alain Peyrefitte in his novel,  “Quand la Chine s’éveillera… le monde tremblera” (When China awakes… The world will tremble) revealed the huge growth potential of China’s economy. Now, it is the IMF’s which warns the economy telling its authorities to “immediately take action” against its troubling “financial weaknesses”, with at the top a huge corporate debt.

Financial sector excluded, the debt of Chinese firms in 2015, was 120% of GDP. This debt should reach 140% of GPD, in 2019. As for bad debts, which are currently estimated at 5.5%, they could rise to 15.5%. According to the IMF, 7% of China’s GDP might be compromised.

To maintain its growth level as well as social peace, China keeps pumping its economy with loans, public investments and accomodating macroeconomic policies. Heavily indebted and overstaffed, State-owned companies refuse to labour and continue borrowing at low rates, and this, still according to the IMF, leads to “misallocation of resources and fosters inefficiency”.

Crippled by an overskilled industry, eroding competitiveness, less profitable exports, the Chinese model is yet to overcome its gaps with a higher level of internal consumption.

The IMF thus sounds the warning bell indicating that without major structural reforms, China’s growth cycle which has lasted for some years now, could very well come to an end. If this were to happen, the global economy will have to find a new driver, and Africa, a new sponsor.