Business · Economy · 14 hrs ago
China’s debt interest costs take a growing share of government spending
China is spending a growing share of its central government budget on interest payments, which are set to account for 19.2% this year.
That is up from 12% in 2014 and above the 14% share reported for the U.S., though below Japan’s 25.6%.
China’s debt interest spending rose 341% between 2013 and 2025, faster than any other major budget category.
The rise comes as China’s economy slows, consumers spend cautiously, investment weakens and the property sector continues to recover from a major crash.
Beijing has encouraged state banks to lend to priority industries, but business debt has doubled since 2019 while revenues have risen only 30%.
The International Monetary Fund estimates China’s government debt at 107% of GDP this year and projects it will reach 124% by 2030.
Higher debt costs may leave less room for other public spending, while borrowing intended to support growth is itself becoming a burden on the economy.
China’s debt interest payments are estimated to take 19.2% of the central government’s general public budget this year, up from 12% in 2014.
A separate report found that interest payments accounted for 19% of Beijing’s spending, more than the 14% share in the U.S. federal budget.
China’s spending on interest payments rose 341% between 2013 and 2025, faster than any other major budget category.
The growing costs come as China’s economy slows and the government and state banks continue to support growth through borrowing and lending.
The International Monetary Fund estimates that China’s general government gross debt reached 107% of GDP this year.
- Who
- China’s central government and public finances.
- What
- Debt interest payments are taking a growing share of government spending.
- When
- The estimates refer to this year; the article was published on October 11, 2026.
- Where
- China.
- Why
- Borrowing has risen as Beijing seeks to support economic growth and prevent job losses.
This story does not have two clearly opposing sides.
The irony is that one driver of both government borrowing and the lax lending standards of [state-owned] banks is the desire to prop up economic growth and prevent job losses
China’s spending on interest payments rose 341%, according to the Center for Strategic and International Studies.
Debt-servicing payments accounted for 12% of the central government’s general public budget.
Conference Board estimates put debt-servicing payments at 19.2% of the central government’s general public budget.
- Interest share
- Estimated 19.2% of China’s central government general public budget this year
- Comparison
- 14% of the U.S. federal budget goes to interest costs
- Interest spending growth
- Up 341% in China between 2013 and 2025
- Government debt
- 107% of GDP this year, according to the IMF
- Debt outlook
- IMF projection of 124% of GDP in 2030
Sources
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