Who are World's Top 10 Largest Creditor Nations?

[Suika]

Same thing to China. Most of China's debt is essentially owned by China government. Majority of China's total debt, which is owed by China's sate-owned corporations, are belonging to the China's state-owned banks. If Japan is not in dangerous position, then why is China?

More importantly, those China state-owned corporations added up tremendous asset through borrowing money from government-owned banks. Those asset like factories, ports, highways, railways and airports etc will be continuously stimulating the economy. That's unlike the countries like Japan, UK US or EU. A lot of debt owed by government is consumed by welfare and health care.

I'm just speaking about Japan's debt situation and not extending a claim on China's.

 

[windywine]

I'm just speaking about Japan's debt situation and not extending a claim on China's.

I was just trying to tell you the structural difference of debt between Japan and China.

 

[Suika]

I was just trying to tell you the structural difference of debt between Japan and China.

The difference is to be expected. Japan went through a phase of massive infrastructure development for decades, probably the main projects being from the 1960s, when the first shinkansen came out, up until the 1990s with the Kansai international airport completed in 1994 and the Akashi Kaikyo suspension bridge completed in 1998. Well I'm not sure how much the government helped pay for these actually, but debt was likely sustained by someone to get these up. Well infrastructure continues to be built, such as the more recent Tokyo Gate bridge (2012), Tokyo Sky Tree (also 2012), and shinkansen line being extended to Hokkaido (2016).

But the main point is that the basic foundation of infrastructure was already completed 2-4 decades ago. Some might conclude that the current levels of debt that China has might not be so good because they just finished building up the basic foundation of infrastructure, or are still working on it. Well I'm not going to make that call. I'd rather not underestimate the health of China's economy.

A few months ago, I was thinking that China's economy might have been in bad shape because there was a time when month after month, their foreign reserves kept dropping going from nearly 4 trillion USD down to 3 trillion USD. Usually, the amount goes up and down, but in this case, its was just drop after drop after drop. Additionally, the RMB weakened. But that trend ended sometime in March or April of this year, and China's foreign reserves made a small rebound, and the RMB strengthened again, and they continue to have money to offer for investing abroad, so it seems that their economy is doing ok now.

 

[Shotgunner51]

Same thing to China. Most of China's debt is essentially owned by China government. Majority of China's total debt, which is owed by China's sate-owned corporations, are belonging to the China's state-owned banks. If Japan is not in dangerous position, then why is China?

More importantly, those China state-owned corporations added up tremendous asset through borrowing money from government-owned banks. Those asset like factories, ports, highways, railways and airports etc will be continuously stimulating the economy. That's unlike the countries like Japan, UK US or EU, of which a lot of debt owed by government is consumed by welfare and health care.

Due to tight fiscal discipline, for example very low defence budgets, China's National Debt (aka Public debt; Central/Federal Government debt; 国债) is very low, at end 2016 it was only 16.135% of GDP.

More importantly it's about composition. China national debt is 99% owned by domestic investors, foreign creditors only amounts to merely 1%. Comparatively speaking, PIIGS and US have far bigger % of their national debts owned by foreigners, and that's a major component of their net international debtor positions.

See post #121 and official link: