Corporate debt in China rises to 160% of GDP

Corporate debt in China accounted for 160% of gross domestic product in 2015, up from 98% in 2008, The Wall Street Journal reported, citing figures from Standard & Poor’s Ratings Services. Outstanding corporate bonds in China jumped 25% to RMB14.6 trillion (US$2.2 trillion), according to central bank data. Policy directing investment into corporate bonds, which can be substantially cheaper for borrowers than benchmark loans, is part of a government push to have firms bear more direct risk in the face of rising bad loan rates at many mainland banks. Around 70% of the surge in bonds last year went to the already debt-ridden sectors of real estate and construction.