New Year on the global stock markets began from deep fall followed by crash of main Chinese indexes. On January 4th, Shanghai Composite Index was down 6.86%. And Hong Kong’s Hang Seng Index also was trading down 2.8 percent by mid-afternoon of that day.

In December of 2015 investors faced another unexpected development – further fall of Caixin Purchasing Managers’ Index. The index was at 48.2, down from 48.6 in November  (any number less than 50 suggests negative sentiment.).

The fall is a reminder of the challenges facing China’s economy, which may be, first of all, less and less manageable debt.

The Chinese companies that are struggling to pay off interest are issuing more debt.

Chinese companies paying off interest