I was looking at some countries debt to GDP Ratios, countries where the quality of life is reported to be awesome. The US's ratio is 123% The UK's is 100% Norway and Germany are approximately 6t5% Japan's is 239% Then I looked at China, it's 13%
China's debt burden is really deceptive though. The provinces there do the bulk of borrowing (far more than US states as a percentage of overall debt). And a lot of Chinese debt financing comes in the form of state owned companies that take out debt in their own names rather than under the federal and provincial governments. There's other stuff like local government financing vehicles which are just entities created by local governments to issue even more debt. So much of China's debt burden boils down to really complex accounting gimmicks. If you add it all up, China's debt burden is actually worse than the combined liabilities of the US federal, state and local governments. If you're looking for a model for debt to GDP ratio, it's actually Australia (who consistently hovers around 40%). Canada historically has been pretty good although the debt to GDP ratio is up to 70% now.
I mean putting the US clearly behind them I don't really know what it means @geeimsobored has put some more perspective on it. I wasn't going to start a thread but it seemed like an issue our debt debaters might be interested in
Have you ever spent much time in China? I can find you small areas in India, Venezuela... in lots of places around the world that are very nice, and where people are enjoying a good life - even comparable in some ways to the highest living standards in the world. Having said that, the overwhelming majority of China is nowhere close to Japan or Germany and the UK - and certainly not on par with the USA. There is a lot of pride in China, and there is a lot of concern in the USA -- but the two countries are miles apart when it comes to quality of life. Also - in the West, and especially in the USA any inequities or prejudices are put under the microscope and aired for the entire world to see, and that simply isn't the case in China and most of the world.
You have to consider how their economies are built and the interplay between businesses and the government. China already is a global power and has been for decades. It isn't the biggest superpower if you want to play that game, but it is arguably the second most powerful county on the planet - for what that is really worth, because if there was a war, it would come down to coalitions and China would not do as well in that regard. Regardless - overall, China is a dominant force in the word in 2025, and should be for at least the projectible future. Having said that - these concerns by Americans are nothing new. I remember the fear of the economic power and growth of Japan.... a tiny nation that at one point was beating the USA in that regard. Everyone attempted to break down why, there were professors and experts that studied Japanese culture and business practices and claimed that they had figured it out...... same with the USSR through the wall falling. The USSR was literally crumbling and there were Americans professing it's brilliance and families were trying to move to the USSR.... when the EU formed there were many liberals and even economists that were convinced it would become the dominant force in the world. At the end of the day - USSR, Japan, EU and now China all did become movers and shakers, and they all have had highs and lows......... but they all had very little to do with the success or failure of the USA as an economic superpower and social superpower. The success of the USA is not attached to the failure or rise of anyone else.
No it's not. They're actually a case study on how inefficient one can use debt. As bad as the US is when it comes to creating productive outlets with debt, China easily takes the cake as the worst. China has been financing infrastructure projects for decades as a way to create growth but it has a productive limit and they've blown past it. Modern infrastructure projects there all have huge negative ROI. It's basically turned into a shortcut to meet GDP targets set by the Politburo but it's just financing artificial GDP growth while simulatenously making the debt to GDP ratio worse. Normally you want the GDP created by the debt to grow faster than the debt itself (to lower the ratio) but in China that hasn't been the case since 2010. It's been all negative ROI infrastructure spending for 15 years and counting. Offshoring debt onto state owned companies, provinces and LGFVs makes the topline debt to GDP ratio look great but like so many Chinese economic statistics, there's so much clever manipulation that the number you see has no bearing on reality. The other thing to note is that China enforces a forced savings policy. Their currency has strict capital controls so you can't move money out of China. Their stock market is rife with insider trading and huge boom/bust cycles that have resulted in virtually no growth over the last few decades. And the only asset class that had any growth was housing (which has fallen apart). So people basically save cash and put it in banks (despite getting virtually no interest) and those cash savings get loaned out at near zero interest by state owned banks to other state institutions. The citizenry is effectively subsidizing state debt and is denied access to asset classes that create real wealth (other than housing). We at least get the benefit of an internationally traded bond system that allows foreigners to lend to us. In China, the citizens are basically forced to lend to the government via the state owned banking system. The whole system is frankly a debt fuelled sham. As I said, if you want to look at models for managing state debt, look at Australia (and until recently Canada). Germany historically has also been very debt averse but they were frankly so extreme that their manufacturing has actually become uncompetitive over time due to the lack of state investment in infrastructure. But for god's sake, don't compare the US to China. China is a bigger basket case than the US. And its in demographic freefall with the primary source of tax revenue for local governments (land sales) totally collapsing. Their fiscal situation is so much worse than ours and will only get worse as growth rates slow down.
from another perspective, Top 10 countries with the highest debt to GDP ratios and other countries want to lend them money best eg has been the USA the lowest debt to GDP ratios other countries don't want to lend them money the best eg has been Russia
Honestly . . .. I am not sure if it *isn't* awesome now I no longer trust out news sources to tell the truth about such things Rocket River
I spent 6 weeks there only a few years ago. I assure you there is nothing awesome about it. There are a lot of people, and there is a lot of infrastructure but it is a mess.
I don't think China is awesome bit I don't think it's bad When I looked this information up I was just wondering what the countries with high standards of living spent to meet those standards. I have a finance degree and can't follow high level discussions of sovereign don't in this forum America has unique problems. I think more racially homogeneous industrialization nations are more comparable to each other. Some of these Ratios are comparable for some countries and some countries are fighting diff issues to solve Social Security is close to bankruptcy. Can that really happen? I know what happened to Germany when they just printed money after wwi but we're not in that situation @geeimsobored I'm not that smart but I knew China has a lot of debt, but i did believe that ratio when I looked it up. I saw the 60 Minutes episode on how China has built all those empty cities to prop up their economy
China is almost certainly doing some shady stuff with their accounting. It's far easier to do with their type of government. Anyone who tries whistleblowing is a goner.
Not necessarily, there are a number of low development countries with high debt ratio's, Sudan, Zambia, Bhutan https://www.imf.org/external/datamapper/CG_DEBT_GDP@GDD/CHN/FRA/DEU/ITA/JPN/GBR/USA Then you have countries in Switzerland, Nordics, Oceania, Taiwan, Ireland, South Korea which are quite low in gov debt to GDP That being said if you look at personal debt vs GDP, it is a spitting image of prosperity vs poverty https://www.imf.org/external/datamapper/PVD_LS@GDD/CHN
because it doesn't have the global reserve currency, China has limited options insofar as artificially stimulating GDP growth. The US has at least one more option available---owing to the fact that it has the global reserve currency---it can QE to the fully extent possible. China can only QE on a piecemeal basis i read an article where the author had factored in this as Govt debt, as well as the negative ROI on state-funded huge infrastructure projects, such as dams and bullet trains, etc. With this adjustment, China's debt-to-GDP ratio ~~ somewhere close to 200%, which is still less than Japan's, which is close to 300%
just to add some context, many other countries claim that US's ability to QE to the fully extent possible, while no one else has that ability, as shady/economic hegemony, as it exports some of US's deficit spending overseas bet you can't even name one. Many countries have complained against China's fiscal/monetary/trade policies---including but not limited to the US,EU, Japan, etc----they are still economically viable.. you do know that the US is starting a taraiff / trade war against China again, no?
