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China-USA comparison: not all debts are equal

During the Covid epidemic, the Chinese state has enabled local governments to borrow at record levels. They are supposed to use it to pay for infrastructure projects and thus boost the economy. As a result, China’s economy has grown as desired but so has the debt burden. Depending on how it is calculated, it even exceeds US debt as a share of GDP. But China has some decisive advantages.

By
Frank Sieren
Image of Frank Sieren

The US and China are both currently trying to boost their respective economic growth with major infrastructure programs and to make their economies more competitive again – even in competition with each other. But as much as the situation of the two heavyweights is similar, the differences are also great. For China, a growth economy, is building up its public debt from a completely different situation than the US.

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