Note that the figures below are vastly underestimated because the Chinese Dictatorship does not ever (a) publish truthful figures of GDP, (b) amortise and mark to market investments, and (c) write down bad debts. Consequently, the true figure of debt to GDP must be closer to 400%! Good luck, Rats! You will soon be bankrupt!
China's debt-to-GDP to rise to 285pc in 2020
Robert Guy
Bank of America has forecast a rise in China's debt-to-ratio to 285 per cent this year as Beijing steps up efforts to bolster growth in the world's second largest economy.
The increase in leverage from 254 per cent in 2019 would mainly rest on the central government given it is viewed as having more capacity to borrow and spend than local governments, businesses and households.
Bank of America sees a "significant" rise in the headline budget deficit ratio this year. It is expected to rise to 4.8 per cent of GDP from 2.8 per cent in 2019.
China debt Bank of America
Beijing is expected to forego the 3 per cent limit that it has stuck to since the financial crisis given pressures from declining fiscal revenues and growing spending on COVID-19 relief.
"Note that this 4.8 per cent deficit is already helped by various potential transfers from the budget adjustment fund and other idle fiscal fund accounts that the government could tap on to."
Bank of American says that before such adjustments, the actual general fiscal deficit could rise to close to 7 per cent of GDP in 2020 from 4.9 per cent in 2019.
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