China’s Debt Interest Costs Hit 19.2% of Budget as Government Debt Reaches 107% of GDP
Updated
Updated · Fortune · Oct 11
China’s Debt Interest Costs Hit 19.2% of Budget as Government Debt Reaches 107% of GDP
3 articles · Updated · Fortune · Oct 11
Summary
Interest payments will absorb 19.2% of China’s central government general public budget this year, up from 12% in 2014 and above the U.S. share of 14%.
Conference Board and CSIS estimates point to a rapid debt buildup: China’s interest spending jumped 341% between 2013 and 2025, far outpacing the 102% rise in total government spending.
107% of GDP — China’s general government gross debt has climbed from 41% in 2015, while a broader public-and-private debt measure excluding finance has topped 300%, according to IMF and Capital Economics data.
State-directed lending meant to support growth has doubled business debt since 2019 while revenues rose only 30%, leaving nearly a third of firms lossmaking and many loans repeatedly rolled over.
China’s slowing growth, weak consumer spending, property slump and trade barriers suggest the debt surge is no longer boosting the economy so much as weighing on it.