China's government debt surpasses 100 trillion yuan threshold

China's government debt has crossed the 100 trillion yuan mark for the first time, reaching 100.6 trillion yuan as of the end of May, according to data released by the People's Bank of China. This significant milestone reflects the country's ongoing efforts to stimulate economic growth through expansive fiscal policies.

In recent years, China has relied on issuing various government bonds to fund public services and major infrastructure projects amid slowing economic growth. Simultaneously, local governments have been actively converting previously undisclosed debts into explicit ones by issuing bonds. This strategy has contributed to the overall rise in government debt levels.

The latest figures from the central bank also indicate a decrease in the growth of social financing. For the first five months of the year, the cumulative increase in social financing reached 17.48 trillion yuan, a drop of 1.16 trillion yuan compared to the same period last year. Government bond net financing also saw a substantial year-on-year decrease of 634 billion yuan.

Official statistics reveal a dramatic increase in government debt, soaring from 46.55 trillion yuan in 2020 to 82.1 trillion yuan in 2024. The debt-to-GDP ratio has climbed from 45.8% to 68.7% during the same period, surpassing the 60% threshold often used by international institutions. By 2025, the debt was projected to reach 96.05 trillion yuan, and now it has officially surpassed 100 trillion yuan, more than doubling in just four years.