I noticed an interesting analysis of China's public debt situation that is worth exploring further. The numbers are quite heavy and deserve attention.

So, let's start with the raw data. By the end of 2025, China's public debt had reached approximately 526.8 trillion yuan, which means more than 375,000 yuan per capita. But the real problem isn't just the total; it's how this debt is managed year after year.

Looking at 2025, the national public budget projected revenues of 21.6 trillion yuan against expenditures of 28.7 trillion. The deficit? 7.1 trillion yuan. It seems like an abstract number until you realize it represents 5% of the projected GDP. To cover this deficit, mainly new debt was needed.

Here's where things get interesting. The outstanding government bonds reached 95.44 trillion yuan. With an average interest rate of 3.5%, interest payments alone amount to 3.34 trillion yuan. This means that nearly 16% of all tax revenues are consumed by interest payments. Even worse: almost 47% of the new debt issued that year was immediately absorbed by interest payments on existing debt.

This is the dynamic that few highlight. In 2025, China's total public debt issuance was 26.3 trillion yuan. But of these, 12.44 trillion yuan was just to refinance maturing debt, and 3.34 trillion yuan was to pay interest. Only about 10.4 trillion yuan remains available for new spending. The rest is just a game of extending existing debt.

And if we look beyond just government bonds? Chinese private debt, considering households and businesses, adds another 370 trillion yuan. The total debt approaches 470 trillion yuan. Not counting implicit debts and hidden liabilities that do not appear on official balance sheets.

The question many ask is: when does it become unsustainable? It's hard to say precisely, but what is clear is that China's public debt is following a trajectory where an increasing portion of resources is dedicated to servicing the debt itself rather than productive investments. It’s a dynamic that characterizes many economic systems, but here the scale is globally significant.