This is because consumption itself does not generate the income needed to service the debts incurred. In Q2 2020, Canada’s GDP declined at an annualized rate of 38%, its worst three-month performance on record. It reduced the central government’s budget deficit-to-gross domestic product target to “around 3.2 per cent” from 3.6 per cent in 2020. Household debt to GDP, in percent in China, March 2006 - June 2020: For that indicator, we provide data for China from March 2006 to June 2020.The average value for China during that period was 33.14 percent with a minimum of 10.8 percent in June 2006 and a maximum of 59.1 percent in June 2020. The government bailed out banks and insurance companies, providing them with low-interest credit. The report called explicitly to stabilize China’s macro leverage. The first is an excessive increase in household debt. According to the 2021 Government Work Report, deleveraging was Percent, Annual, Not Seasonally Adjusted 1996 to 2017 (2019-10-21) Amount Outstanding of Domestic Debt Securities for Non-financial Corporations Issuers, All Maturities, Residence of Issuer in China . Outstanding Domestic Private Debt Securities to GDP for China . According to China’s National Institution for Finance and Development, China’s debt-to-GDP ratio rose 6 percentage points.over 2019 to 245% by the end of the year. Australia was another outlier, but for a different reason; the country’s household debt decreased by almost 5% relative to GDP. As of December 2019, the nation with the highest debt-to-GDP ratio is Japan, with a ratio of 237%. An increase in debt wasn’t the only reason for the country’s worsening debt-to-GDP ratios. The ratio of China’s non-financial corporate debt to GDP reached 163.1 per cent in the third quarter – roughly double the 83.5 per cent ratio in the US, according to the BIS. As the People’s Bank of China has recently said, it is not appropriate to rely on consumer finance to expand consumption. In 1992, Japans's Nikkei (stock market) crashed. China is set to resume its deleveraging campaign this year, but at a modest pace, as it seeks to balance financial risks with putting excessive downward pressure on an economy still recovering from the coronavirus shock of a year ago. Total Chinese debt across household, government, financial and non-financial corporate sectors rose from over 300% of GDP to nearly 318% in the … Indeed we expect China’s debt-to-GDP ratio to fall by 1 to 2 percentage points in 2021 after a sharp increase of 24 percentage points in 2020, thanks to both credit slowdown and nominal GDP rebound. Using official data, China’s debt to GDP ratio is likely to rise between 16-22 per cent this year in contrast to a 6 per cent rise last year. China’s situation is more worrying when considering that the primary source of its high debt comes from the corporate sector, as its borrowing costs are higher than the government’s.

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