China facing possible debt crisis: bank watchdog

Beijing

CHINA's banking sector could be facing an imminent debt crisis, a global central bank watchdog has warned, fuelling fresh fears about a blowout in the world's No 2 economy that could hit the world economy.

The Bank for International Settlements (BIS) - dubbed the central bank of central banks - said that a gauge of Chinese debt had hit a record high in the first quarter of the year.

China's credit to gross domestic product (GDP) gap reached 30.1 per cent in the first quarter of 2016, its highest level ever and far above the 10 per cent level associated with banking risks, the Switzerland-based bank said in a quarterly report released late on Sunday.

The gauge measures the difference between the credit…