China’s Debt-to-GDP Ratio Rises a Record of 286.1%

[stompix]

Note!!! that this is from data published by the CCP, so probably 386% might be more accurate

https://www.bloomberg.com/news/articles/2024-01-17/china-s-debt-to-gdp-ratio-rises-to-fresh-record-of-286-1
Archived is paywalled:
https://archive.ph/bYIYM

The macro leverage ratio — or total debt as a percentage of gross domestic product — inched up to 286.1% in the fourth quarter.

What does it mean?
It means simply that right now China's total debt is higher then the USA in debt/gdp ratio!
https://www.ft.com/content/630f828c-ce4b-4f41-a867-9593bfaf0528

How bad is it?
Exclusive: China orders indebted local governments to halt some infrastructure projects-sources

Pretty bad since the CCP is asking local government to stop infrastructure project, might not sound that important, but this is China and the CCP, infrastructure projects as big as they can be are a show of power and wealth, the megalomania things they built are not just for practical purpose but for their politics, as every dictator would want buildings bigger, shinier and bigger again than everyone to show the world his might! Usually with citizens starving to death looking at them!

The new directive gives a more detailed list of infrastructure projects for the governments to avoid, two sources said.  Beijing is concerned about potential default due to the local governments' large debts and weaker growth prospects, the sources said. China's local government debt hit 76% of gross domestic product in 2022, the latest data available, up from 62% in 2019 and dwarfing central government debt at 21%.

Now, one can start to understand why China is scared of a property crash,  the real estate constitutes 30% of China's GDP, if that would take a 20% hit it would balloon the debt to 305-310% to gdp bankrupting local governments, and this is the reason why prices are fixed in China, see my other topic about how they try deal with that:
China real estate crisis: Buy a house and get a gold bar!


PS!

I'm pretty sure that some even after readying the title are already typing something about the US debt so keep the shitty low effort propaganda whataboutism out of this:

Stick to the topic and leave the frustration of having a green card rejected somewhere else! 
I know it's a pain for some who wake up ten times at night to check if the de-dollarisation is happening to read stuff like this, but again, this is reality!

[Upgrade00]

Pretty bad since the CCP is asking local government to stop infrastructure project, might not sound that important, but this is China and the CCP, infrastructure projects as big as they can be are a show of power and wealth
<snip>

I read somewhere last year that a huge part of the problem China had with growing debts was poor allocation of resources to revenue sources like infrastructure and property. So it makes sense that they are easing up on hat as the debt problem only continues to grow.

I'm pretty sure that some even after readying the title are already typing something about the US debt so keep the shitty low effort propaganda whataboutism out of this:

I think this warning will only invite the argument more that discouraging it. 

[Lucius]

There is an old saying that says "he who digs a hole under someone else will fall into it himself" - and if we take into account that the theory is that the Chinese deliberately (or accidentally) released the virus from the laboratory in order to shake the world economy (or something worse), it seems that they have created huge problems for themselves.

I personally not surprised that they are doing so badly, considering that I lived in a communist creation that first collapsed economically, and then a bloody war was directed in which robbers looted "social property" while ordinary people died in the war - some to save their lives, others to conquer other people's territory and kill as many people as possible.

I always wonder if I will see the Chinese rebel against the CP and become some kind of democracy, or if a lot of water will flow through the Yangtze before that happens.

Now we just have to wait for those who think that the Chinese would be much better off (economically) if they didn't ban Bitcoin, and hope that they learned the difference between a billion and a trillion

[franky1]

yesterdays debt. becomes tomorrows GDP bump

GDP = private consumption + gross private investment + government investment + government spending + (exports – imports)

note where yesterdays debt becomes tomorrows "investment/spending"

[Poker Player]

I saw this thread yesterday and, again, it seems that this section gives more play to doom and gloom news, especially if it is about USA and EU. I had to rescue the thread from almost the second page.

Now, one can start to understand why China is scared of a property crash,  the real estate constitutes 30% of China's GDP, if that would take a 20% hit it would balloon the debt to 305-310% to gdp bankrupting local governments, and this is the reason why prices are fixed in China, see my other topic about how they try deal with that:
China real estate crisis: Buy a house and get a gold bar!

When the 2008 crisis broke out, which started in the real estate sector, although it affected the rest of the sectors, China was not greatly affected, as it continued to grow at close to double-digit rates during those years. They have not yet seen a crisis in the sector and it will come sooner or later. In the UK and Spain it was very noticeable. First the real estate sector collapses and then the rest of the sectors are affected. Let's see how this one goes.

[franky1]

I saw this thread yesterday and, again, it seems that this section gives more play to doom and gloom news, especially if it is about USA and EU. I had to rescue the thread from almost the second page.

stompix seems to be on a wide tirade of "china bad, america great"
he has previously made topics to guestimate energy use of network and then claim china uses more fossil(but lets slip his favourite US miner uses fossil)
he then screamed repeatedly about how his favourite american mining farm uses cheaper fossil then china's mix of fossil/renewable
he then compares US real estate issues to china real estate using muffled stats
he then compares US population decline vs chinese population using muffled stats

heck im not even chinese and have no chinese ancestry, but even i can look passed the mainstream media assertions to see the more factual stats from better sources that dont show the same story stompix wants to recite

seems stompix wants to show off american patriotism using twisted stats rather than discuss real economics of topics

but look at his personal disclaimer, he doesnt want people talking about america negatively, nor mention american issues as a true comparison

maybe stompix has a side hustle working as a writer for fox news

also

[Casdinyard]

Could be the sign of China's weakening powers as it collapses under its own weight just like what happened during Mao's reign. You would think that after killing hundreds of millions of chinese people to starvation and forced labor China's going to realize what they are lacking and yet here we are.

China's not in the best state economically from the get-go. Their economy's a massive bubble that they tried their hardest to keep within themselves. Elites of the elites there can't take their money out of China without risking their riches being seized by the government to be "repossessed" cause they basically hold the economy and social standing of China together. Their housing bubble collapsed before the rest of the world did as firms default on their loans. Education is going to the shitbox as kids who are very reliant on their boarding school setup are left to be homeschooled during the Pandemic. Factory workers aren't getting paid and if you put up a strike you're immediately silenced in one way or another. It's a massive shitshow out there but this is not gonna be enough to allow other countries to be complacent. They still have their nukes which are very much paid for by the by, and if a country ever tried to pick a fight with them they'd realize why China's going ham on military over the past few decades.

[hatshepsut93]

When the 2008 crisis broke out, which started in the real estate sector, although it affected the rest of the sectors, China was not greatly affected, as it continued to grow at close to double-digit rates during those years. They have not yet seen a crisis in the sector and it will come sooner or later. In the UK and Spain it was very noticeable. First the real estate sector collapses and then the rest of the sectors are affected. Let's see how this one goes.

China is eventually, maybe soon, going to get their bearish side of a market cycle, because their past economic growth could not be indefinitely sustained, and they will have to endure the losses of all the bad investments that were made during the boom period. It's not necessarily going to be a huge economic collapse which usually happens when there's a total mismanagement coming from the government, and CCP are not completely stupid, but China will have to endure some years of close to zero or even small negative growth.

[0t3p0t]

When the 2008 crisis broke out, which started in the real estate sector, although it affected the rest of the sectors, China was not greatly affected, as it continued to grow at close to double-digit rates during those years. They have not yet seen a crisis in the sector and it will come sooner or later. In the UK and Spain it was very noticeable. First the real estate sector collapses and then the rest of the sectors are affected. Let's see how this one goes.

China is eventually, maybe soon, going to get their bearish side of a market cycle, because their past economic growth could not be indefinitely sustained, and they will have to endure the losses of all the bad investments that were made during the boom period. It's not necessarily going to be a huge economic collapse which usually happens when there's a total mismanagement coming from the government, and CCP are not completely stupid, but China will have to endure some years of close to zero or even small negative growth.

I think it already has begun given that the Chinese president himself on his speech admitted about the challenges of it's economy, he stated that

companies have had a tough time and people has difficulties finding a job

Source: https://www.businessinsider.com/china-economy-gdp-xi-jinping-admits-tough-time-enterprises-jobs-2024-1?amp

And I also got this:

Over time debt has risen relative to the size of the economy— although gross debt levels are not out of line with those of other major economies, such as the United States and Japan.

Source: https://www.imf.org/en/Publications/fandd/issues/2023/12/China-bumpy-path-Eswar-Prasad

I am not anti China but since the CCP is known to be doing something like a propaganda game, so do you think this is really happening on it's economy? Isn't this a kind of diversional tactics? I mean this could be related to the famous quote from Sun Tzu that says "Appear weak when you are strong, and strong when you are weak."
😁

[DeathAngel]

Not looking good & we all know that the West has big exposure to Chinese markets & vice versa. It’s like a game of dominoes, when one falls they all will. I still hope the world economy can stay resolute, we really do not want to witness another Great Depression.

[Wind_FURY]

Note!!! that this is from data published by the CCP, so probably 386% might be more accurate

Double that. Haha.

I'm pretty sure that some even after readying the title are already typing something about the US debt so keep the shitty low effort propaganda whataboutism out of this:

Stick to the topic and leave the frustration of having a green card rejected somewhere else!
I know it's a pain for some who wake up ten times at night to check if the de-dollarisation is happening to read stuff like this, but again, this is reality!

Actually, if the United States' economy is under a worse condition than China's economy, then those people who debate that China will become the next dominant economic super power should be no stranger to the fact that what's bad for the U.S. economy will absolutely be bad for the Chinese economy. Why? Because the U.S. is China's biggest customer for Chinese exported/manufactured goods.

It's a fact that China's domestic demand alone can't support the whole manufacturing sector.

[stompix]

stompix stompix stompix

Yeah Franky, do you have something intelligible to say?

I saw this thread yesterday and, again, it seems that this section gives more play to doom and gloom news, especially if it is about USA and EU. I had to rescue the thread from almost the second page.

The usual, US debt grows everyone screams, disaster, famine, bankruptcies, run to the hills..
China debts grows, this is actually good!

When the 2008 crisis broke out, which started in the real estate sector, although it affected the rest of the sectors, China was not greatly affected, as it continued to grow at close to double-digit rates during those years. They have not yet seen a crisis in the sector and it will come sooner or later. In the UK and Spain it was very noticeable. First the real estate sector collapses and then the rest of the sectors are affected. Let's see how this one goes.

China real-estate sector is heavy controlled, basically if the city/region/province doesn't want for prices to go down it can issue limits on price per sqm, so you won't be allowed to sell below that, that's why some investors sell you the house with a gift such as a car for 200 000 instead of asking for a house at 150 000! 
In theory this would control the prices as it prevent people from selling , they can go further and not allow you to sell at all, it's controlled market so again in theory easier to prop, till the serious cracks appear and then there is no way out of it, goes down like a house of cards worse than if it had fallen the first time!

It's a fact that China's domestic demand alone can't support the whole manufacturing sector.

We're getting closer to the point of finding out this, I'm living in Europe so the experience might be different from the US but lately a ton of cheap stuff in the chain stores no longer comes from China, it's mostly South East Asia, the trend is pretty obvious with clothes, I don't think I've ever seen so few chinese products,  just India, Bangladesh, Indonesia even Egypt and weirder than everything Mexico! Same for all that cheap plastics stuff, till last year I don't think I've ever seen something made in Philippines in a store for all my life!

[Wind_FURY]

It's a fact that China's domestic demand alone can't support the whole manufacturing sector.

We're getting closer to the point of finding out this, I'm living in Europe so the experience might be different from the US but lately a ton of cheap stuff in the chain stores no longer comes from China, it's mostly South East Asia, the trend is pretty obvious with clothes, I don't think I've ever seen so few chinese products,  just India, Bangladesh, Indonesia even Egypt and weirder than everything Mexico! Same for all that cheap plastics stuff, till last year I don't think I've ever seen something made in Philippines in a store for all my life!

There's also that, a competition against China for cheap labor. But it is projected that India will slowly start taking over China's place as the world's dominant manufacturing factory/production hub. That's because of India's increasing population, increasing abundance of skilled labor, and their growing economy.

Plus China's population is getting older, and therefore the number if skilled workers get old too and decrease. ¯\_(ツ)_/¯

China might also start mobilizing a stabilization fund/rescue package to provide liquidity and save its stock market from crashing. It's either they will turn on the Yuan-Money-Printer, or get it from state-owned companies.

https://www.businesstimes.com.sg/international/global/china-weighs-stock-market-rescue-package-backed-two-trillion-yuan

[kryptqnick]

Upon reading it, I decided to compare it with the US debt-to-GDP ratio, and yeah, it's a huge difference. People have been saying that the US debt is catastrophic, when there's clearly a #2 economy that has a much worse situation, and apparently has had it worse for over a decade if we consider this specific factor. But, while it's steadily growing, it's harder to estimate the impact of it, just like in the case of the US. Some keep saying it'll crash the economy, but years go by without that happening. It's not good, for sure, but whether it will make a huge negative impact on China's economy short-term remains to be seen.

[el kaka22]

When you start to ignore the red flags for the sake of growth, you will outgrow your own income level. Just because you have some money, doesn't mean that you will have money forever, and that is why it is not going to be easy to not crash. Chian grew way faster than they could afford to, and that is their issue, and they had some insane amount of income that was coming to them, which made them think that it will continue forever, and growth will not stop.

With pandemic and global economical crisis all around the world, income staggered and they already had some cracks in the ceiling, which resulted with them not having anything that would be profitable ever again, that resulted with them having even worse afterwards and crash.

[WillyAp]

Reading here makes me wonder why people believe that a government is a homogeneous body?

How often a lower governmental clerk runs haywire in any government no one knows. It happens in all governments that people being part of the government brew their own stew.

[mindrust]

#	Country	Exports 2022	Imports 2022	Trade balance 2022
1-	China	$3593523.20	$2716150.90	$877372.30
219-	USA	$2064278.300	$3375819.20	−$1311540.90

https://en.wikipedia.org/wiki/List_of_countries_by_net_exports

I listed the countries who have the most positive trade balance. China is #1, guess where USA is. At the bottom of the list. This is the data from 2022 but 2023 won't be miraculously different.

All the US producing is worthless papers. China is manufacturing the real stuff. This can't continue forever like this. Sooner or later China will want to buy something from the US and that will be the start of the next world war because the US don't have "something" to give China for their dollars just like they didn't have the gold back in the 70's.

[franky1]

todays debt becomes tomorrows GDP. and thats how governments grow their rank in "super power"
when another country threatens replaceing the #1 spot, the number one ranker then overblows the bank to raise the GDP to strengthen retaining the #1 status

GDP is a misleading number that literally and figuratively inflates itself

..
when these numbers become a pissing contest of each side fluffing the numbers to find each others negative statistic to point fingers at "ha ha this shows your negative" just becomes tomorrows "oh crap now their positive"

..
when people then read mainstream media and then form racial/cognitive bias to certain nations. they end up showing their racial profile not their economics points of view

[WillyAp]

#	Country	Exports 2022	Imports 2022	Trade balance 2022
1-	China	$3593523.20	$2716150.90	$877372.30
219-	USA	$2064278.300	$3375819.20	−$1311540.90

https://en.wikipedia.org/wiki/List_of_countries_by_net_exports

I listed the countries who have the most positive trade balance. China is #1, guess where USA is. At the bottom of the list. This is the data from 2022 but 2023 won't be miraculously different.

All the US producing is worthless papers. China is manufacturing the real stuff. This can't continue forever like this. Sooner or later China will want to buy something from the US and that will be the start of the next world war because the US don't have "something" to give China for their dollars just like they didn't have the gold back in the 70's.

The US produces much more than paper.
Did China research and develop most of the products they are selling?
Still 90% of all financial transactions are done through SWIFT.
They have all those buyers China needs to have a positive balance.

An I'm not a fan of the US System. neither of socialism and other isms

[Fortify]

Note!!! that this is from data published by the CCP, so probably 386% might be more accurate

https://www.bloomberg.com/news/articles/2024-01-17/china-s-debt-to-gdp-ratio-rises-to-fresh-record-of-286-1
Archived is paywalled:
https://archive.ph/bYIYM

The macro leverage ratio — or total debt as a percentage of gross domestic product — inched up to 286.1% in the fourth quarter.

What does it mean?
It means simply that right now China's total debt is higher then the USA in debt/gdp ratio!
https://www.ft.com/content/630f828c-ce4b-4f41-a867-9593bfaf0528

How bad is it?
Exclusive: China orders indebted local governments to halt some infrastructure projects-sources

Pretty bad since the CCP is asking local government to stop infrastructure project, might not sound that important, but this is China and the CCP, infrastructure projects as big as they can be are a show of power and wealth, the megalomania things they built are not just for practical purpose but for their politics, as every dictator would want buildings bigger, shinier and bigger again than everyone to show the world his might! Usually with citizens starving to death looking at them!

The new directive gives a more detailed list of infrastructure projects for the governments to avoid, two sources said.  Beijing is concerned about potential default due to the local governments' large debts and weaker growth prospects, the sources said. China's local government debt hit 76% of gross domestic product in 2022, the latest data available, up from 62% in 2019 and dwarfing central government debt at 21%.

Now, one can start to understand why China is scared of a property crash,  the real estate constitutes 30% of China's GDP, if that would take a 20% hit it would balloon the debt to 305-310% to gdp bankrupting local governments, and this is the reason why prices are fixed in China, see my other topic about how they try deal with that:
China real estate crisis: Buy a house and get a gold bar!


PS!

I'm pretty sure that some even after readying the title are already typing something about the US debt so keep the shitty low effort propaganda whataboutism out of this:

Stick to the topic and leave the frustration of having a green card rejected somewhere else! 
I know it's a pain for some who wake up ten times at night to check if the de-dollarisation is happening to read stuff like this, but again, this is reality!

While every country tries to massage and sooth their numbers, more developed countries understand that creating independent statistics which accurately diagnose problems in the economy is more important than trying to appease the dictator in charge. The problem with communist and authoritarian countries is that creating a problem, even something as innocuous looking like compiling figures, may often annoy the wrong political person which can make your life a lot harder. Then you start to end up in an echo chamber, where figures are tailored to what looks good and makes the country look better, rather than helping to identify a problem. The more Xi Jinping sticks around, the worse this is going to get.