How China accumulated $28 trillion in debt in such a short time

[Defender@@]

Most of us are layman bro! Let's put it simply, it's a zero sum game, the world cannot be indebted unless aliens show up. A debt for a borrower is an asset for the lender, so between nations, some are debtors, some are creditors.

But the entire world is a big market, or in fact many markets. Say you have surplus money (e.g. savings), someone else borrow from you (directly or through financial sector e.g. bank), deal done, a debt. When statistician sum up all the deals in the entire world, yes, a lot of debts. So simply put, debts are owned by savings.

hahaha,,, thats a million dollar question,,

The world is in debt due to faulty economic system,,, all the debt is payable to backs,,, and central banks has unlimited authority to print currency notes therefore they can create an unlimited amount of debt,,, Have you ever wonder what does a currency notes means? it means nothing ,,, its just a piece of paper with an assumed value in your mind,,,

This assumption is the core basis of all this system ,,, 2008 crisis was the reason of that system but world central bank specially US federal bank prints even more currency and hence created more debt,,,

So in short it is a cycle in which bank keep on printing notes and increasing size of assets whereas others will become indebted,, untill some people will say that i cannot pay more and eventaully bank will say to the account holder as my creditors defaulted therefore i cannot pay out of your accounts,,, and this cycle will result in government defaults ....

 

[TheTruth]

Sorry for the layman question but I am not an economist
If the entire world is in debt who does it owe it to???
Aliens ???

Haha! Just to other people and itself. That's why this "total debt" horsecrap is nonsense, state owned Chinese companies just owe money to other state owned companies.

 

[Shotgunner51]

So if debts are owed to savings and most of the people have their saving in the various banking institutions so is it fair to assume that all debts are owed to international banks instead of countries

For simplicity let's use "intra-national" not "inter-national" bank, or simply just commercial bank. And "countries" is a complicated concept, let's talk international financial/capital account separately.

You are right bro! You deposit your money with a bank, then the bank loan to borrowers, so effectively the debts are owned by the banks not you. The bank owe you. The commercial bank charge borrower lending interests, pay your savings interests, and make a living in interests spread, and of course they can lose if business is bad. Also note when you deposit 10 bucks with the bank, they can only lend upto say 8 bucks to borrowers. The 2 bucks has to stay (Reserve Deposit as required by the central bank, or monetary authority, accordingly to prevailing monetary policy).

So you see these "debts", or more precisely domestic credit, is normal business.

Please feel free to contact me if you have any more query, take care bro!

 

[xunzi]

sure , everything has been artificially pushed up , that is the real concern GDP also was artificially pushed up , thanks to huge investments in waste infrastructure . moreover around 4 trillion $ market capitalization wipe out during 2015 is not a small amount .

If we are in debts, so are your India govt begging us to invest in India? Grow a brain. LOL

 

[Khan_patriot]

For simplicity let's use "intra-national" not "inter-national" bank, or simply just commercial bank. And "countries" is a complicated concept, let's talk international financial/capital account separately.

You are right bro! You deposit your money with a bank, then the bank loan to borrowers, so effectively the debts are owned by the banks not you. The bank owe you. The commercial bank charge borrower lending interests, pay your savings interests, and make a living in interests spread, and of course they can lose if business is bad. Also note when you deposit 10 bucks with the bank, they can only lend upto say 8 bucks to borrowers. The 2 bucks has to stay (Reserve Deposit as required by the central bank, or monetary authority, accordingly to prevailing monetary policy).

So you see these "debts", or more precisely domestic credit, is normal business.

Please feel free to contact me if you have any more query, take care bro!

Thank u bro for the explanation

 

[mirage]

If we are in debts, so are your India govt begging us to invest in India? Grow a brain. LOL

your statement gives me an impression that you are lunatic insane incapable person to have a sane debate as china's debt ( it is internal debt in question and is the problem as external debt is around 1.9 trillion $ )has no correlation to indians asking to invest in their country . no one is begging , ming bai le ma ?????????? indian government is inviting investments which is not begging but trying to earn the demographics dividends which unfortunately china dont have /.

 

[SrNair]

The author of the article claims total Chinese debt is 28 trillion dollars and it's half of the world's entire debt.

I've posted another source that claims US total debt is 60 trillion dollars.

Do the simple math please. How can China have half of the entire World's debt with 28 trillion dollars worth of debt while US have 60 trillion dollars of debt?

I didn't intend to compare both economies. I intended to show the obvious misinformation represented in this glorified blog post.

There is a different between these two nations.And that is a very fundamental difference .
US is a developed nation ,a consumer based yet advanced industrial economy .And US$ is an international rese3rve currency
But China is still a developing nation .You cant compare US and PRC .But US and Japan is almost equal in such cases.