China's debt-to-GDP ratio hit a jaw-dropping 366% in Q1 2024, a new record.
China's debt size is absolutely mind-blowing
China's debt-to-GDP ratio hit a massive 366% in Q1 2024, a new record. Since the 2008 Great Financial Crisis, the ratio has more than doubled.
To put this differently, for 1 unit of GDP the Chinese economy has produced 3.66 units of debt burden.
By sector, non-financial corporates have the highest ratio, at 171%, followed by the government’s 86%.
Households and financial entities debt-to-GDP is 64% and 45%, respectively.
What does it mean for the world’s second-largest economy?
You can find out the answer below along with what I thought about the Chinese economy in general as well as the stock market. This was written even before China’s stocks started to decline again.
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