China's debt-to-GDP ratio climbed to a new record high in 2023 despite the slow pace of borrowing, reflecting the economy's weakening growth, a new report from a state-backed think tank shows.
The macro leverage ratio, which measures total outstanding nonfinancial debt as a share of nominal gross domestic product, rose to 287.8% in 2023, 13.5 percentage points higher than a year ago, according to a report by the National Institution for Finance and Development (NIFD).
China's debt-to-GDP ratio climbed to a new record high in 2023 despite the slow pace of borrowing, reflecting the economy's weakening growth, a new report from a state-backed think tank shows.
In 2023, the growth of real gross domestic product (GDP) in China amounted to 5.2 percent. For 2024, the IMF expects a GDP growth rate of around 4.6 percent.
The U.S. debt to China is approximately $1.059 trillion. That's 27.8 percent of the $3.8 trillion in treasury bills, notes, and bonds held by foreign countries. The rest of the $19.9 trillion national debt is owned by either the American people or by the U.S. government itself.
At the top is Japan, whose national debt has remained above 100% of its GDP for two decades, reaching 255% in 2023. *For the U.S. and Canada, gross debt levels were adjusted to exclude unfunded pension liabilities of government employees' defined-benefit pension plans.
China is in the midst of a profound economic crisis. Growth rates are flagging as an unsustainable mountain of debt piles up; China's debt-to-GDP ratio reached a record 288% in 2023.
Most of this debt came from building infrastructure, much of which is unlikely to generate revenues sufficient to pay off the obligations. With China's trend growth rate notably lower now than it was, it leaves a burden over the long haul.
The debt to GDP ratio can serve as a metric for evaluating a country's fiscal health and its level of debt sustainability. Japan has the highest debt to GDP ratio, standing at 262%.
Post-1978 economic reforms China's average GDP growth had been over 10% annually for over three decades, and in some years, growth exceeded 14% annually. $18.560 trillion (nominal; 2024 est.)$35.032 trillion (PPP; 2024 est.)
According to a 2021 report by the Department of Agriculture, China owns 384,000 acres of American agricultural land; ownership which jumped by 30% from 2019 to 2020.
If China (or any other nation that has a trade surplus with the U.S.) stops buying U.S. Treasuries or even starts dumping its U.S. forex reserves, its trade surplus would become a trade deficit—something which no export-oriented economy would want, as they would be worse off as a result.
In 2023, China's national general public budget revenue reached RMB 23.4 trillion ($3.3 trillion) and expenditure grew to RMB 28.2 trillion ($4 trillion), resulting in an official deficit of RMB 4.9 trillion ($690 billion).
As of March 2023, the Japanese public debt is estimated to be approximately 9.2 trillion US Dollars (1.30 quadrillion yen), or 263% of GDP, and is the highest of any developed nation. 43.3% of this debt is held by the Bank of Japan.
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