War on the Rocks: Could China’s Massive Public Debt Torpedo the Global Economy?

Wed December, 2021, Age: 1 year

China might be the creditor to the world, but it is also riddled with debt. Between public and corporate debt, China is one of the most indebted large economies in the world. Even worse, its state-owned banks are sitting on mountains of bad debts and non-performing loans, particularly in the real-estate sector. And this is just on the surface. Underneath lies a staggering quantity of murky debt, off-balance-sheet lending, wealth management products, and local government funding vehicles. All told, China’s debt is considerably larger than it appears at first glance, and so high that some analysts feel it is at dangerous levels and could spill over, doing severe damage to the world economy. What does this say about the stability of the global economy and Western anxieties about China’s rise to a preeminent place in world affairs?



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