In the News

China now has the biggest corporate debt in the world

Geoff Riley

2nd September 2016

One of the big risks facing the Chinese economy is the staggering level of corporate debt as the economy slows down. According to this report from the Financial Times, "China’s total outstanding corporate debt in 2015 was $17.8tn, or 171 per cent of their GDP, making China’s corporate debt mountain by far the world’s largest in both absolute and relative terms."

Nearly half of China's biggest businesses are categorised as "highly leveraged" which means that they have a huge ratio of borrowing (debt) to profit (before interest and tax).

The debt mountain is one of those topics that all students of the Chinese economy should be following closely ahead of their June 2017 papers!

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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