China's Debt Ratio Falls to 308.2% as Households Deleverage and Firms Cut Investment
Updated
Updated · South China Morning Post · Jul 31
China's Debt Ratio Falls to 308.2% as Households Deleverage and Firms Cut Investment
2 articles · Updated · South China Morning Post · Jul 31
Summary
China’s debt-to-GDP ratio slipped 1.1 percentage points to 308.2% in the second quarter, with private-sector borrowing weakening even as overall debt levels stayed high.
Household debt fell 1.3 percentage points to 57.7% of GDP after deleveraging that began in mid-2024, the NIFD said, challenging views that household balance sheets were already recovering.
Mortgage lending contracted for a 13th straight quarter, while consumer lending declines deepened to 1.8% from 0.2% in the first quarter as falling home prices and weak income growth curbed borrowing.
Nominal GDP grew 5.9% in the quarter, but the report said sustaining better inflation expectations and faster nominal growth will depend on repairing private-sector balance sheets and the government taking on more debt.