China's gov't debt expansion has corresponding asset backing: report

China's government debt expansion has corresponding asset backing, particularly state-owned enterprise equity, compared with the debt situation in the United States and Japan, according to the monetary policy report for the first quarter of 2025 released by the central bank on Friday,

The report by the People Bank of China revealed that the country's total government assets in 2022 amounted to 166 percent of gross domestic product (GDP), while liabilities were 75 percent of GDP, resulting in net assets equal to 91 percent of GDP.

A significant portion of these assets is tied to state-owned enterprises with strong growth potential, according to the report.

"The expansion of China's government debt is backed by corresponding assets, which is significant to strengthening the guarantee of livelihood, improving income distribution, promoting economic transformation, and maintaining dynamic balance," said Dong Ximiao, chief researcher of the Merchants Union Consumer Finance Company Limited (MUCFC).

In contrast, the U.S. government holds relatively few financial assets. In 2022, U.S. debt amounted to 142 percent of GDP, while assets, mainly government deposits and student loans, accounted for just 23 percent.

This resulted in a net debt of 119 percent, with debt sustainability dependent on economic growth and deficit management.

Japan also faces significant debt but offsets this with substantial assets. In 2022, Japan's liabilities were 252 percent of GDP, while assets, including a large pension fund, totaled 134 percent of GDP.

Like the U.S., Japan's net debt ratio stood at 119 percent, indicating a similar balance between debt and assets.

China's fiscal support has significantly increased this year, with nearly 10 trillion yuan (over 1.38 trillion U.S. dollars) in special bonds issued during the first quarter, driving investment growth and boosting economic confidence.

Experts suggest that the next phase of fiscal policy should focus on adjusting expenditure to prioritize consumption-driven sectors, such as pensions, child-rearing, and healthcare, while also reinforcing support for vulnerable groups, including the elderly in rural areas and low-income households.

China's gov't debt expansion has corresponding asset backing: report

China on Wednesday condemned the Philippines' "thief crying stop thief" behavior after Manila organized vessels to illegally intrude into the lagoon of China's Xianbin Jiao in the South China Sea.

Jiang Bin, a spokesperson for China's Ministry of National Defense, made the remarks in response to Philippines' false accusations about Chinese maritime law enforcement actions against Philippine personnel near Xianbin Jiao.

Jiang said that the Philippines deliberately organized and dispatched a large number of vessels to intrude into the lagoon of Xianbin Jiao illegally. Personnel on the Philippine vessels even brandished knives to threaten Chinese coast guard officers conducting lawful operations, an act that was "utterly egregious in nature".

"The measures taken by the Chinese side were necessary actions to safeguard its territorial sovereignty and maritime rights and interests," the spokesperson emphasized. "They were reasonable, lawful, professional, and restrained."

"In the face of clear facts, certain people on the Philippine side are blatantly distorting the facts, making excuses to deny their own infringement and provocation. They even turned around to accuse China, which is completely reversing right and wrong and crying thief while being one themselves," said Jiang.

"For some time, the Philippine side has repeatedly stirred up incidents at sea, staging self-directed and self-staged farces, deliberately smearing and accusing China, agitating the situation in the South China Sea and undermining regional stability. We solemnly warn the Philippine side that playing the victim, hyping up and sensationalizing the issue will not change the nature of its illegal infringements, nor will it mislead the international community or shake China's resolve to safeguard its rights in accordance with the law. China will continue to take firm and effective measures to resolutely respond to all acts of infringement and provocation," he continued.

China reaffirms sovereignty over Xianbin Jiao, denounces Philippines' false accusations