China’s Debt Level Rises

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Debt level rises: China’s macro leverage ratio continued to rise and hit a new record in the third quarter. The ratio grew 2.5 percentage points to reach 298.1%. In total, the ratio grew by just over 10 percentage points in the first nine months of the year. The indicator measures outstanding nonfinancial debt — the borrowings of households, nonfinancial companies and the government — as a percentage of nominal GDP.

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China's macro leverage ratio rose to 298.1% in Q3, growing by over 10 percentage points in nine months, reflecting increased nonfinancial debt as a percentage of GDP.
A $1.4 trillion package was unveiled to manage local governments' hidden debts, which totaled 14.3 trillion yuan as of 2023-end, emphasizing the central government's focus on financial risk mitigation.
Chinese President Xi Jinping will attend the APEC meeting and G20 Summit in November, marking his return to international summits after Premier Li Qiang's previous attendance.

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Who’s Who

China Social Security Fund: The article mentions that a former vice chairman of China's national social security fund highlighted the importance of attracting "patient capital" to invest in tech companies to foster advanced, innovation-driven productivity. This involves long-term investments where investors are willing to delay immediate returns, with state investors being pivotal in this effort amidst challenges from private equity and venture capital demanding quick returns.

China Academy of Information and Communications Technology: The China Academy of Information and Communications Technology (CAICT) focuses on digital technologies crucial for fostering "new quality productive forces" in China. At the Caixin Summit, Vice President Wang Zhiqin highlighted the role of technologies like 5G in aiding digital transformation and stressed the importance of improved computing power infrastructure for AI development. CAICT is involved in leveraging digital and AI technologies to boost productivity in Chinese enterprises.

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What Happened When

End of 2023：: China's local governments had 14.3 trillion yuan in outstanding hidden debt.

Third quarter of 2024：: China's macro leverage ratio hit a new record of 298.1%.

November 8, 2024：: China unveiled a 10 trillion yuan package for local governments to address hidden debt.

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