Debts: China

Treasury written question – answered on 27th May 2020.

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Photo of John Spellar John Spellar Labour, Warley

To ask the Chancellor of the Exchequer, pursuant to the Answer of 13 February 2020 to Question 13414 on Debts: China, whether his Department has made a revised assessment of that risk level since the answer was given.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

Recent data suggests that Chinese debt increased further in the first quarter of 2020, as the Covid-19 shock is pushing public and private borrowing even higher.

Several institutions, including the International Monetary Fund, raised concerns prior to the Covid-19 outbreak on the risks high levels of Chinese debt could pose to global financial stability. The Covid-19 shock is likely to exacerbate these risks.

In its interim Financial Stability Report published on 7 May 2020, the Bank of England’s Financial Policy Committee found that major UK banks should remain resilient to the Covid-19 shock to both UK and global economies, including China. HMT will continue to work alongside both the Bank of England and global institutions in monitoring the risks posed by Chinese indebtedness.

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