China’s whole debt burden rose strongly within the first quarter of 2019 as Beijing allowed more loans and local authorities bond issuance to assist shore up the slowing economy, in accordance with estimates by the Institute of International Finance.
The figure stood at almost 304 % of its gross domestic product (GDP) within the first three months of the year, up from 297% a year earlier, the US-based trade association stated.
The Chinese government have sought to rein in corporate debt by restricting borrowing through informal channels, known as shadow banking. While the restrictions have prompted a reduction in company debt in non-financial sectors, net borrowing in different sectors has surged, bringing total debt to over US$40 trillion – some 15 % of overall global debt, based on data launched by the Institute of International Finance.
Total debt in the US has risen by US$2.9 trillion since the first quarter of 2018, bringing the general debt mountain to an all-time high of over US$69 trillion within the first quarter of 2019.
Family debt stays one of the quickest rising sectors, rising to 54 % of GDP within the first quarter from 49.7 % within the first quarter of 2018, the Institute of International Finance stated.
Authorities debt rose to 51 % within the first quarter from 47.4 % a year earlier, whereas financial sector debt rose to 43 % from 41.3 %.
The non-monetary company sector was the one group to point out a slowdown in borrowing, with the debt-to-GDP ratio falling to 155.6 % from 158.3 % a year earlier.