(Yicai) March 6 -- China’s government debt amounted to around CNY96 trillion (USD13.9 trillion) as of the end of last year, well within the ceiling approved by the country’s parliament for that year. The nation’s overall government debt risks continue to be manageable and under control, experts said.

Of the CNY96 trillion, outstanding central government debt stood at around CNY41.23 trillion (USD5.9 trillion), while local government debt totaled approximately CNY54.82 trillion, Xinhua News Agency reported today, citing the latest central and local government budget reports. This equates to 43 percent of government debt being held by the central government last year, while local governments accounted for the remainder.

To control risks, China manages government debt through a debt quota system, meaning the total debt balance must remain within an approved limit. The National People’s Congress approved a government debt limit of approximately CNY99.85 trillion (USD14.4 trillion) for 2025.

China has strengthened government debt management in recent years, said Luo Zhiheng, chief economist at Yuekai Securities, who has long focused on government debt. In particular, authorities have strictly limited new hidden local government debt and stepped up efforts to resolve existing implicit debt. This has kept the overall debt level within a controllable range. Compared with other major economies, China’s leverage ratio is still in a relatively safe zone.

China’s gross domestic product reached around CNY140.19 trillion (USD20.3 trillion) in 2025, according to preliminary data from the National Bureau of Statistics. Based on this, China’s government debt-to-GDP ratio is approximately 68.5 percent, significantly below that of other major economies.

The average government debt-to-GDP ratio among G20 countries is 118.2 percent, and for G7 countries, it is 123.2 percent, according to a report released by the International Monetary Fund last April.

China’s government debt balance has consistently stayed within the quota approved by the NPC every year, Wen Laicheng, a professor at the Central University of Finance and Economics, told Yicai. With the country’s debt ratio well below the G20 average and the scale of implicit debt falling rapidly, overall government debt risks remain manageable.

Debt Resolution Measures

The Chinese government has rolled out a slew of measures in recent years to address local government implicit debt. As part of this effort, CNY2.8 trillion (USD406 billion) of local government bonds were issued in 2025 to swap existing hidden debt, effectively extending maturities and lowering interest costs to ease local debt pressures.

The swift implementation of these debt-resolution policies has significantly reduced implicit debt, and local government financing platforms have been sharply scaled back, greatly easing debt risks at the local government level, Wen said.

China still has considerable room to borrow more, particularly at the central government level, Luo said. The country’s low inflation and relatively low interest rates also provide additional room for government borrowing.

To stabilize the economy, China will continue to pursue a more proactive fiscal policy this year, which includes raising borrowing to expand fiscal spending and maintain strong government expenditure.

The central government debt ceiling this year will be approximately CNY48.55 trillion (USD7 trillion), while the limit for local government debt will be around CNY63.19 trillion, according to the budget report. This means the total national government debt limit will climb 1 percent this year from last year to CNY111.74 trillion (USD16.1 trillion).

Editor: Kim Taylor