China's private-sector debt, excluding banks, is projected to reach 323 percent of gross domestic product in 2026, according to an International Monetary Fund forecast, underscoring the strains on the world's second-largest economy.
The country channels well over 40 percent of its total economic output into investment, yet growth has slowed to just 4 to 5 percent, signaling diminishing returns on capital spending. The IMF, in a paper published in 2025, characterized China's investment levels as "excessive".
Compounding the economic headwinds, demographic projections suggest China's population could halve by the end of the century, raising concerns about a shrinking workforce and weakening domestic demand in the decades ahead.