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2 October 2015 Global Economic Perspectives: A hard landing in China? net foreign assets as large as China's and a current account surplus. China doesn't need to import capital to sustain credit growth. Neither are banks in China likely voluntarily to suspend financing even to high- risk borrowers. Government ownership ensures, we think, that banks will continue to lend to finance infrastructure investment even where purely profit- maximizing lenders would not. Eventually, this will have to change. Depositors will not forever keep their savings in a banking system that keeps piling up more and more implicit bad loans. But with general government debt of only about 55% of GDP. China is a long way away from a sovereign debt crisis, in our view. And therefore it is a long way away from a banking crisis and a hard landing. Michael Spencer, Hong Kong, (+852122038305 Page 12 Deutsche Bank Securities Inc. CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0118536 CONFIDENTIAL SDNY_GM_00264720 EFTA01458563