China’s debt exceeds 300% of GDP

China’s total debt has exceeded 300 per cent of GDP and is expected to increase further, but the central bank will maintain its policy of easing when necessary, said a deputy governor of the People’s Bank of China, on Thursday.

Speaking at the annual Boao Forum, Xuan Changneng stated that China’s position on implementing a suitably relaxed monetary policy is evident, and there is sufficient flexibility for monetary policy adjustments.

The money supply (M2) to GDP ratio has exceeded 200 per cent, and the macro leverage ratio has surpassed 300 per cent, with both indicators continuing to increase.

China’s macro leverage ratio, a measure of the economy’s total debt burden, has been increasing consistently as the government aims to support economic expansion.

Attribution: Reuters

Subediting: Y.Yasser