This is CBS. I am the world. I'm John Batsu with my colleague in Fran Gordon Chang at

Corden G Chang. The People's Republic of China is in deep debt. The headline at the Wall Street

Journal, however, gives us directions to understand the depth of the debt and how the business

model that brought them to this impasse does not offer a solution. The headline, fueled by long

credit binge, China's economy faces drag from debt purge. Subhead consumers, businesses, and

local governments are looking to de-leverage. A lot of jargon, so we welcome Ann Stephenson Yang,

and is the author of the upcoming new edition of China alone, Return to Isolation. And I'll take

that headline and start in pieces. Long credit binge. What is that? What are they talking about?

Good evening, too. Good evening, John. So what that means is essentially the Chinese began their

reform and opening period with very few domestic assets and investment at that time in the 1980s was

very productive for China because if you've never had a road and then suddenly you have a road,

you can sell your stuff to the cities. But what happened was in 2008-09 when the International

Economy Crash China felt, oh my god, we're too dependent on the International Economy, we have to

start depending on ourselves. So they pushed a ton of credit into the economy. And between that time

and now they've built up as many assets in the banking system as it took the United States 150

years to build. So there's been a massive credit binge. So that's the long credit binge. Now

China's economy faces drag from debt purge, drag from debt purge. What does that mean?

Well, that means that they're trying to overcome this, but it's very difficult. You know,

it's often discussed what proportion Chinese debt is to GDP and it kind of doesn't seem to mean

very much. But I think you can take it as a proxy for what's unproductive in the economy because

after all, if you invest $10 and you get $12 of benefit or $10 of benefit, then GDP grows. So your

ratio doesn't increase. So what it means when you have 300% or more debt to GDP is that those are

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