Global debt reached a record high in 2025 and rose in the world’s two largest economies
2-MIN READ2-MINCarol Yangin BeijingPublished: 7:00pm, 5 Mar 2026As the United States grapples with mounting debt, China is doubling down on efforts to clean up its own balance sheet, vowing to tackle risks with “iron discipline”.The pledge came as the world’s second-largest economy weathers a years-long real estate slump and cooling domestic demand. Beijing faces growing pressure to balance short-term growth targets with longer-term deleveraging, as it seeks to transition to a more sustainable economy.
Li urged local authorities to proactively defuse debt risks and strictly guard against “fake debt reduction”.
Data from the Washington-based institution showed that China’s government debt rose to 96.8 per cent of gross domestic product by the end of 2025, up from 88.4 per cent a year earlier.
