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China's debt situation is equally dire. In the first three quarters of 2025, the government issued an average of 2.267 trillion yuan monthly, a 22.3% increase over 2024. To put this into perspective, monthly bond issuance back in 2019 was under 700 billion yuan—meaning current borrowing levels are triple those pre-pandemic figures.
This debt expansion is facilitated by the central bank's off-balance-sheet operations. Through a complex web of reverse repurchase agreements, the government effectively creates a shadow debt market, with bonds not appearing directly on official balance sheets. By mid-October, the total bonds held via these off-market deals had surged to 6.3 trillion yuan—a growth rate that risks collapsing the entire debt framework if sustained.