Key Charts - Size and Structure
A Snapshot of Chinese Debt
- This chart shows not only China’s continually increasing debt levels, but also the difference between bank and non-bank loan growth. Last year, China’s corporate borrowing reached a high of RMB ¥159 trillion, and it shows no sign of letting up. Q1 2014 figures reached RMB ¥49.53 trillion.
- A large portion of the debt is held by corporates, especially state-owned enterprises and property developers. Despite low profitability and high borrowing costs, non-financials continue to leverage up.
- While off-balance-sheet lending such as trust loans, entrusted corporate-to-corporate loans, and bankers acceptances have grown immensely, it may soon fall due to increasing regulatory concerns. Nevertheless, traditional lending remains strong.
Note: Non-bank debt refers to entrusted loans, trust loans, bank acceptance, and corporate bond financing. Through Q1 2014.
Sources: Datastream, Milken Institute.