China doesn't face a debt-default risk

The ratio of outstanding government debt by the end of a year to that year's GDP is a key indicator of whether a government faces a debt-default risk. The debt ratio can reflect an economy's ability to repay its debts. Studies show China's overall debt is under control, as its debt ratio is within safety limits and sovereign balance sheet is quite sound - the total debt ratio of China's central and local governments was 38.8 percent at the end of 2016, far lower than the 60 percent red line set by the Maastricht Treaty signed by European Community members in 1992 to integrate Europe.

China's liability ratio, too, is lower than the ratios of major economies and some emerging market economies, and even lower than the members of the Organization for Economic Cooperation and Development.

China's debt ratio is 52.97 percentage points lower than the average of the OECD members - the central government's debt ratio is 62.68 percentage points lower than the OECD members', though the local governments' ratio is 9.71 percentage points higher than the OECD average.