"By contrast, China's total debt-to-GDP ratio, excluding the financial sector, doubled in that span and has now topped 300%, according to Mark Williams, chief Asia economist at Capital Economics."
"Williams calculated that nearly 40% of outstanding debt is now owed by the public sector, including so-called local government financing vehicles. The result is total debt that surpasses the U.S., eurozone, the U.K., and other emerging markets. Aside from some smaller economies, only Japan has more debt."
"he pointed out China's debt surge has come despite weaker borrowing from households, which have been battered by the real estate market's collapse. But borrowing by companies as well as the central and local governments has continued to far outpace GDP growth, which has slowed in recent years, pushing the overall debt ratio higher."
"China's current level of indebtedness puts it in a league of its own. Of course, U.S. federal debt has set its own grim milestones, and is now more than 100% of GDP for the first time since the immediate aftermath of World War II."
China’s technological capabilities will be showcased as President Donald Trump meets Xi Jinping, but China’s state-led growth model is slowing and debt is rising. A broad measure of indebtedness shows borrowing as a share of GDP has fallen in the United States since 2010, while China’s total debt-to-GDP ratio excluding the financial sector has doubled and now exceeds 300%. The debt surge has occurred even as household borrowing weakened due to the real estate market collapse. Company borrowing and central and local government borrowing have continued to outpace slower GDP growth, raising the overall debt ratio. Nearly 40% of outstanding debt is owed by the public sector, including local government financing vehicles, leaving China with more total debt than most major economies except Japan.
Read at Fortune
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