Moody's – China’s debt has increased to around 280% of GDP

According to the rating agency, Moody’s, latest report on China, the world’s second largest economy’s debt has ballooned to round 280% of its GDP and believe that the economy is exposed to contingent liability risks.

Key Findings:

Many sovereigns, including China, are exposed to contingent liability risks from the banking system and state-owned enterprise debt

Across all sectors, debt in China has increased to around 280% of GDP

In china, estimates that portion of SOE liabilities that could potentially require restructuring amounts to 20-25% of GDP

Believes that without reform of state-owned enterprises in China, contingent liabilities would likely rise