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Macro Risks: China's Addiction to Debt

Geoff Riley

22nd August 2017

The scale of debt in the (slowing) Chinese economy remains one of the biggest risks facing the global economy.

Here are some updated charts on debt courtesy of FT data - click here for the main article

The raw numbers are that China’s total debt has grown from about $6tn at the time of the global financial crisis to nearly $28tn by the end of last year. Total debt is now over 240% of Chinese GDP and will rise further in the years ahead.

Recently the IMF warned about the dangers to the Chinese economy of historically high debt levels. 

Read China's Economic Outlook in Six Charts

According to the IMF, "total non-financial sector debt—which includes household, corporate and government debt—is expected to continue to rise strongly, reaching almost 300 percent of GDP by 2022, up from 242 percent in 2016. This raises concerns for a possible sharp decline in growth in the medium term."

China's Debt Explosion

Some related tweets linking to articles and data on the Chinese debt issue.

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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