While the absolute size of China’s debt load is a concern, more worrying is the speed at which it has accumulated.
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China's total debt rose to a record 237 per cent of gross domestic product in the first quarter, far above emerging-market counterparts, raising the risk of a financial crisis or a prolonged slowdown in growth, economists warn.Beijing has turned to massive lending to boost economic growth, bringing total net debt to Rmb163tn ($25tn) at the end of March, including both domestic and foreign borrowing, according to Financial Times calculations.While the absolute size of China's debt load is a concern, more worrying is the speed at which it has accumulated – Chinese debt was only 148 per cent of GDP at the end of 2007 .The country's present level of debt, and its increasing links to global financial markets, partly informed the International Monetary Fund's recent warning that China poses a growing risk to advanced economies.The BIS data, which is based on similar methodology to the FT, put Chinese debt at 249 per cent of GDP, which was broadly comparable with the Eurozone's figure of 270 per cent and the US level of 248 per cent.
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