A commentator discussed the difference between China’s current economic predicament and the situation back in 2008. In 2008, China was able to issue 4 trillion yuan (US$ 570 billion) to pump up the economy. This time, however, Beijing may not be able to regenerate the same result as the current situation is far worse than before.
He gave the following example:
- In 2008, China’s GDP was about 30 trillion yuan. By 2023, its GDP reached 126 trillion yuan, a fourfold increase, making rescue efforts much more difficult.
- In 2008, M2 (money supply) was 47.5 trillion yuan. By the end of 2023, M2 had exceeded 300 trillion yuan, more than six times that of 2008, leaving very little room for further monetary expansion.
- In 2008, the household debt ratio was less than 18 percent; it is 65 percent in 2024.
- At the end of 2008, local government debt was around 5 trillion yuan (roughly balanced); by 2023, the outstanding balance of local government debt was 40.74 trillion yuan.
- At the end of 2008, the national debt balance was about 5.33 trillion yuan, with 854.9 billion yuan in national debt issued that year. By the end of 2023, the national debt balance had reached 30.03 trillion yuan, with 11.14 trillion yuan of national debt issued over the year.
Source: Epoch Times, October 10, 2024
https://www.epochtimes.com/gb/24/10/9/n14347115.htm