China’s Debt: Structure, Determinants and Sustainability

Lixin Sun

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we analyse the evolution of China’s debt structure in terms of a new comprehensive debt dataset and then identify the determinants of China’s debt structure using stepwise multivariate regression; furthermore, employing a fiscal space framework and DSR approach, we assess the sustainability of China’s domestic and external debt. The empirical results suggest that first, China’s GDP growth rate, the borrowing costs and the financial markets’ development are key common determining factors for China’s debt structure; second, the highly indebted local governments and non-financial corporations could lead to potential risks for China’s financial stability. Nevertheless, China’s debt by sector is sound and sustainable in the near and medium term.

Keywords: Debt Structure; Debt Sustainability; Public and Private Debt; China’s Economy (search for similar items in EconPapers)
JEL-codes: E62 H63 H74 (search for similar items in EconPapers)
Date: 2015-08, Revised 2015-10
New Economics Papers: this item is included in nep-cna, nep-mac and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:68548

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