Economic bubble called China!
China wants War with India (Part 10)
The total debt of China is 303% of it’s GDP as per Reuters which quoted International Institute of Finance. Thus in 2019 the total debt of China stood at 40 trillion USD which is equivalent to 15% of global debt. Imagine out of 192 countries, just one country owes over 1/6th of the global debt.
As per South China Morning Post this debt has risen to 317% in May 2020. Remember that this news paper is, like all media inside China, prints only what is suitable to Government. Now do a quick math and calculate what shall be servicing cost of this debt? It means the annual liability to pay interest even if no debt is repaid in a particular year. As per this link the rate of interest fixed by Reserve Bank of China is 2.72%
Please note that the countries, especially those whose currency is not pegged to dollar have to pay interest much higher than that is fixed by reserve Bank. Even USA whose Reserve Bank called Federal Reserve is presently at 0.25% yet it is forced to borrow money at six times that rate. Now Assuming that China has to service its debt at 4.5% per year, how much is yearly pay out?