China’s Debt Burden Mounts As Interest Payments Consume 19.2 Per Cent Of Government Budget
New Delhi, October 15, 2026: China’s debt burden has increased sharply in recent years, pushing the country’s interest payments on borrowings above even the high levels seen in the US economy, according to a media report. Citing new estimates from the Conference Board, the Financial Times reported that debt-servicing payments in China will account for 19.2% of the central government’s general…
China's debt burden continues to burden the country, with interest payments on borrowings now consuming 19.2% of the government's budget, according to a recent report. This figure has more than doubled since 2014, when it stood at 12%. The Financial Times cited estimates from the Conference Board to report on this growing debt burden.
The Center for Strategic and International Studies (CSIS) also reported that interest payments on debt accounted for 19% of Beijing's spending. This represents a significant increase from 14% of the US federal budget that was allocated to interest costs. Furthermore, China's spending on interest payments has surged by 341% between 2013 and 2025, faster than any other major budget category.
While total spending increased by 102% during the same period, outlays on social security and employment rose by 207%. Moreover, science and technology spending grew by 137%, and defence spending increased by 141%. In contrast, the US has also been grappling with a significant debt burden, with interest payments on debt surging by around 390% since 2013, totaling $1 trillion.
Despite the challenges faced by both economies, the report noted that they have been following diverging economic paths. The US economy is showing signs of acceleration, fueled by the AI boom, despite high inflation. Consumer spending remains resilient, unemployment is low, and stock markets are at or near record highs.
However, China's GDP growth is slowing and is off track to meet its annual target of 4.5% to 5%. While export-oriented sectors are expanding rapidly, Chinese consumers are hesitant to spend, investment is weak, the property sector is recovering from a severe crash, and Chinese stocks have remained subdued. The report highlighted that China's state-led growth model is facing challenges, and Beijing's state-owned banks are directing financing towards priority industries such as electric vehicles, robotics, artificial intelligence, and renewable energy.
Written by urgent.news from Free Press Journal's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
