Despite maintaining relatively low national debt growth compared to other economic giants for many years, China’s situation is changing. The country is now experiencing a surge in the national debt that threatens the economic growth it has achieved in recent decades.
In this line, data acquired by Finbold indicates that as of April 12, China’s national debt amounted to $14.34 trillion, ranking second globally. This value reflects a year-on-year (YoY) increase of $3.81 trillion, or 36.18%, compared to the $10.53 trillion recorded in 2022.
The United States, holding the highest national debt globally, has a total of $31.68 trillion, representing a YoY increase of $1.3 trillion or 4.28%, reaching $30.38 trillion. China’s national debt has surged almost three times that of the United States in the past 12 months.
In the third spot, Japan has a national debt of $13.36 trillion, indicating a drop of $1.49 trillion YoY from $14.85 trillion. The United Kingdom follows closely at $3.75 trillion, an annual addition of $0.45 trillion, while Germany ranks fifth with a national debt of $3.32 trillion, representing a reduction of 0.3%.
Regarding Gross Domestic Product (GDP), the US maintains the highest GDP globally, at $26.32 trillion as of April 12, an 8.8% growth from the $24.19 trillion recorded 12 months ago. China ranks second with a GDP of $17.63 trillion, marking an annual increase of 2.08%.
Japan has the third highest GDP globally, amounting to $4.48 trillion, representing a drop of 14.34%. Germany and the UK account for a GDP of $4.20 trillion and $3.32 trillion, respectively.
China’s national debt growth triggers
The research analyzed the drivers behind China’s latest national debt uptick. According to the research report:
“China’s national debt has been growing due to a combination of factors, including government spending on development projects and slowing economic growth. The national debt growth has come with the state’s injection of credit into government-owned enterprises in response to the aftermath of the global financial crisis.”
Looking ahead, China’s demographic challenge and social security pension obligations burden are likely to see the country increase its debt situation as it battles economic uncertainty.