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Employees work on a pylon in Chuzhou, Anhui province, January 13, 2014.
Employees work on a pylon in Chuzhou, Anhui province, January 13, 2014.
(China Daily/Reuters)

How China helped fuel rising Canadian household debt

My column this week highlighted the huge disparity between the financial health of Canadian consumers (terrible) and U.S. households (largely deleveraged and ready to spend) but I didn’t get into the reason why the disparity exists: China.

The chart below highlights the tremendous effect of China’s mid-crisis debt explosion on Canadian asset prices. Materials stocks – which made up 40 per cent of the S&P/TSX Composite index at the time – were yanked out of the doldrums as the Middle Kingdom’s monetary expansion grew.