China’s debt-to-GDP ratio has risen to an unprecedented high in the wake of the Covid pandemic, according to the latest figures from the Bank for International Settlements (BIS).
Credit extended to China’s non-financial sector stood at USD$51.87 trillion as of the end of the first half, equal to around 295% of national GDP, according to a data released by BIS on Monday.
The print is the highest debt-to-GDP ratio for China since records began in 1995, exceeding a previous peak hit at the end of 2020 by six percentage points.
BIS data points to borrowing by government as the chief driver behind China’s record-high debt-to-GDP ratio, with data from the People’s Bank of China (PBOC) highlighting lacklustre growth in corporate and household debt amidst renewed rounds of Covid prevention measures.
