Recently, China has been getting ahead by many indicators, both positive and negative. According to the latest official data, the common debt of companies and regional authorities topped 250% of GDP. This data makes it much more difficult for the government to support steady economic growth without high risks of financial crisis. Experts give a special note to the pace at which the government debt is rising. The numbers can hardly surprise anyone, but the speed of the debt generation is a matter of big concern. By comparison, some countries have even higher debt burdens, for example, the U.S. has 260% of GDP, the U.K., 277%, and Japan has a total debt-to-GDP ratio of 415%. However, these amounts are rising much slower than the Chinese borrowings. Moreover, the above-mentioned states are considered to be developed, while China is an emerging country. “China has become indebted before it has become rich,” - Chen Long, an economist at Gavekal Dragonomics, commented the situation. Experts refer to calculations of Standard Chartered Bank, saying that at the end of 2008 the debt of Beijing was about 147% of GDP. Today's 251% shows that a high level of debt amid cooling economic growth leads to more inefficient use of capital. As the proof of their assertions, experts cite the example of towns of apartment buildings being empty. Another instance is massive overcapacity. "Chinese authorities understand the need to slow credit growth and are willing to “sacrifice” economic growth to “ensure their long-term stability," - said Changyong Rhee, the director of the IMF's Asia and Pacific Department. Analysts at Moody's believe that effective reforms will exert major influence on the economic growth rate, but the Chinese economy itself will grow at a slower pace than in the last 30 years.
