Soaring corporate debt is a serious and worsening problem in China that needs to be tackled quickly if Beijing wants to avoid potential systemic risk to itself and the global economy, a senior International Monetary Fund official warned, according to The Wall Street Journal. While China’s total debt of around 225% of gross domestic product isn’t particularly high by global standards, its corporate debt at approximately 145% of GDP is high by any measure, the multilateral lending agency said. A defining characteristic of China’s mounting liability problem is its state-owned enterprises, which by IMF calculations account for around 55% of corporate debt but only produce 22% of economic output.
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