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China pledges ‘iron discipline’ to tackle debt risks as US borrowing under Trump surges
Global debt reached a record high in 2025 and rose in the world’s two largest economies
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Carol Yangin Beijing
As 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.
In the government work report delivered on Thursday to Beijing’s annual parliamentary session, Premier Li Qiang said “curbing the growth of non-compliant hidden debt must be enforced with ‘iron discipline’.”
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Li urged local authorities to proactively defuse debt risks and strictly guard against “fake debt reduction”.
China and the US accounted for a large share of the global increase in debt last year, the Institute of International Finance (IIF) reported last week. Global debt climbed to a record high, rising at its fastest annual pace since the pandemic.
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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.
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