Having coined the new term "Balance Sheet

S. Korea's economy "risks of collapse" looming

Having coined the new term "Balance Sheet Recession" while analyzing the lost two decades of the Japanese economy, Taiwan-born Japanese economist Richard C. Koo recently pointed out to the South China Morning Post that the current downturn in the Chinese economy is a typical "Balance Sheet Recession."

A "general recession" is caused by fluctuations in the economic cycle, but a "borrowing balance sheet recession" is characterized by a slowdown in household consumption and corporate investment, which occurs when high levels of household and corporate debt cause them to lose spending and investment capabilities

Personally, I believe that the current downturn in the Chinese economy is due to the fact that the growth model of the Chinese economy has contradictions and flaws that are not sustainable  
I don't agree at all with the view that the downturn in China's economy is simply a "loan-contrast table recession," as Richard C. Koo argues

Rather, the Korean economy, which has the world's No. 1 debt and the pace of world's No. 1 debt growth, is likely to fall into what Richard C. Koo calls a "borrowing balance sheet recession."

Most disturbing and frightening is that if the Korean economy falls into a ``loan-to-balance sheet recession,'' it may take decades, not years, to get out of it, unlike a ``general recession.''