Is China in debt right now?
China's debt is more than 250 percent of GDP, higher than the United States. It remains lower than Japan, the world's most indebted leading economy, but some experts say the concern is that China's debt has surged at the sort of pace that usually leads to a financial bust and economic slump.
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.
| Characteristic | National debt in billion U.S. dollars |
|---|---|
| 2021 | 11,269.44 |
| 2020 | 9,853.44 |
| 2019 | 8,197.03 |
| 2018 | 7,107.34 |
As recently as 2020, total debt in the United States relative to GDP exceeded China's. But as of mid-2022, China's relative debt burden stood 40 percent higher than America's.
At the top is Japan, whose national debt has remained above 100% of its GDP for two decades, reaching 255% in 2023.
Public sector debt was RMB 30.3 trillion (53.2% of GDP) while private sector debt (including both household and non-financial corporate sector) amounted to RMB 103.5 trillion (181.9% of GDP). The banking sector is still the biggest lender in China.
Since the U.S. dollar has a variable exchange rate, however, any sale by any nation holding huge U.S. debt or dollar reserves will trigger the adjustment of the trade balance at the international level. The offloaded U.S. reserves by China will either end up with another nation or will return back to the U.S.
Among other countries, Japan and China have continued to be the top owners of US debt during the last two decades. Since the dollar is a strong currency that is accepted globally, holding a substantial amount of US debt can be beneficial.
China's debt has risen dramatically in the past decade, largely the result of credit fed to state-owned enterprises in the wake of the global financial crisis.
The total debt is nearly $34 trillion, but changes somewhat depending on how you calculate it. And about a third, or 30%, of the publicly held national debt is owned by foreign countries and foreign investors. The biggest foreign holder of U.S. debt is Japan, followed by China.
Which country has no debt?
| Characteristic | National debt in relation to GDP |
|---|---|
| Macao SAR | 0% |
| Brunei Darussalam | 2.06% |
| Kuwait | 3.08% |
| Hong Kong SAR | 4.27% |
In total, other territories hold about $7.4 trillion in U.S. debt. Japan owns the most at $1.1 trillion, followed by China, with $859 billion, and the United Kingdom at $668 billion. In isolation, this $7.4 trillion amount is a lot, said Scott Morris, a senior fellow at the Center for Global Development.
Russia divested from all US bond instruments, the only debts the Federal government has, and still owes the US and other investors nearly 300 billion US Dollars. The national debt in Russia was forecast to increase between 2023 and 2028 by in total 16.1 billion U.S.
[2] A report by the credit rating agency S&P Global in 2022 estimated that 79 per cent of corporate debt in China was owed by SOEs (the IMF does not break down the proportion of debt owed by SOEs).
Tax hikes alone are rarely enough to stimulate the economy and pay down debt. Governments often issue debt in the form of bonds to raise money. Spending cuts and tax hikes combined have helped lower the deficit. Bailouts and debt defaults have disadvantages but can help a government solve a debt problem.
It began rising at a fast rate in the 1980's and was accelerated through events like the Iraq Wars and the 2008 Great Recession. Most recently, the debt made another big jump thanks to the pandemic with the federal government spending significantly more than it took in to keep the country running.
China Jobless Rate Falls to 5.2%
China's surveyed unemployment rate edged down to 5.2% in March 2024, down from 5.3% in the previous month, in line with market expectations.
15, 2023, and $32 trillion on June 15, 2023, hitting this accelerated pace. Before that, the $1 trillion move higher from $31 trillion took about eight months. U.S. debt, which is the amount of money the federal government borrows to cover operating expenses, now stands at nearly $34.4 trillion, as of Wednesday.
An International Monetary Fund report puts the number at $9.5 trillion, equivalent to half the country's economy. But from the enthusiastic way that the cities have embraced investment — China's old playbook for economic growth — it's hard to tell that they're deeply in debt.
China owns 384,000 acres of American agricultural land. That's a 30% increase just since 2019. And on top of that, they own land near an air force base in North Dakota.
How much does China owe the United States?
China is one of the United States's largest creditors, owning about $859.4 billion in U.S. debt. 1 However, it does not own the most U.S. debt of any foreign country. Nations borrowing from each other may be as old as the concept of money.
As a result, totals from January 2023 are lower than reported. As of January 2023, the five countries owning the most US debt are Japan ($1.1 trillion), China ($859 billion), the United Kingdom ($668 billion), Belgium ($331 billion), and Luxembourg ($318 billion).
China owns 380,000 acres of land in the U.S. Here's where
The Smithfield feed processing mill producing food for nearby hog-raising farms in Milford, Utah. In 2021, a Chinese company bought land near an Air Force base in Grand Forks, N.D., sending lawmakers into a frenzy.
China has offloaded USD 22.7 billion in US treasury bills recently over concerns over security and a further delay to expected interest rate cuts by the American Federal Reserve, amidst its intensified strategic rivalry with Washington.
Domestic Holders of Federal Debt
The Federal Reserve, which purchases and sells Treasury securities as a means to influence federal interest rates and the nation's money supply, is the largest holder of such debt.
