In the wake of the Beijing-led recovery from the COVID-19 pandemic, China’s debt burden has continued to rise, highlighting a financial system that still struggles to manage an unprecedented debt expansion after the 2008 global financial crisis. , US-China Economic and Security Review Commission (USCC) said in its 2021 annual report to Congress.
In 2016, China’s financial regulators launched a debt deleveraging campaign amid fears of increasing instability in the financial system. However, China’s debt has continued to rise, especially in the past year as the Chinese Communist Party used fiscal stimulus to address the economic slowdown caused by COVID-19, the USCC’s 551-page report said.
The USCC is a bipartisan committee created by Congress to monitor and report on trade, economic, and defense issues in the US-China relationship.
By the end of the fourth quarter of 2019, China’s total credit reached 262.9 percent of its GDP at $37.2 trillion (RMB 259 trillion), up from 178.8 percent at the end of 2010, according to data from the Bank for International Settlements, it reads.
China’s debt growth accelerated between the end of 2019 and the end of 2020, reaching 289.5 percent of GDP.
In December 2020, China’s former finance minister Lou Jiwei said the national debt would “become an increasing threat to China’s future fiscal stability and economic security,” the USCC said.
The Chinese government has continued to emphasize the importance of debt reduction, listing debt reduction as one of the “five big tasks” for the year in the government’s March 2021 work report, the report said.
(With input from ANI)
Disclaimer: This post was automatically published from an agency feed without any text editing and has not been reviewed by an editor
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