China is budgeting a larger share of spending for debt interest than the United States, but that does not mean China pays more interest in absolute currency terms. CSIS ChinaPower puts debt interest at 19% of China’s 2026 central expenditure budget, compared with 14% of U.S. federal outlays in fiscal year 2026. The measures use different budget denominators and fiscal-period labels, so this is a useful comparison of shares—not a harmonized comparison of total bills.
What “above U.S. levels” means
The comparison is about the portion of each cited spending total used for interest, not the size of the countries’ interest payments in yuan or dollars. The Chinese figure covers the central expenditure budget; the U.S. figure covers federal outlays. CSIS ChinaPower’s 2026 comparison also gives Japan’s expected fiscal-year 2026 interest share as 25.6%.
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| Country | Interest share | Denominator and period |
|---|---|---|
| China | 19% | 2026 central expenditure budget |
| United States | 14% | FY2026 federal outlays |
| Japan | 25.6% | Expected FY2026 share |
These figures, reported by CSIS ChinaPower, are not perfectly like-for-like: the Chinese measure is a central budget share, the U.S. measure is a share of federal outlays, and the fiscal periods are named differently. They establish that China’s cited share is higher than the U.S. figure, not that China’s total interest bill exceeds America’s.
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Why the interest budget line has grown so quickly
CSIS ChinaPower reports that Chinese general-public-budget spending on debt interest rose 341% from 2013 to 2025, the fastest growth among the major budget categories in its analysis. Over the same period, total expenditure rose 102%, while social-security-and-employment spending rose 206.5%.
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Those are nominal budget-line changes: they do not adjust for inflation, and they do not measure interest on every public-sector liability. The figures show the interest line growing much faster than these other categories within the general public budget, not a 341% rise in the real cost of borrowing across all of China’s public finances.
What China budgeted and spent
China’s Ministry of Finance reported final central debt-interest expenditure of RMB 819.361 billion in 2025. That was below the RMB 834.55 billion budget; the ministry attributed the underspend to interest rates being lower than expected.
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For 2026, the central budget provides RMB 873.99 billion for debt interest, 6.7% more than the 2025 budget allocation. The comparison is between a 2026 budget and the prior year’s budget—not between the 2026 plan and 2025’s final outturn.
| Central debt-interest figure | Amount | Status |
|---|---|---|
| 2025 | RMB 834.55 billion | Budget |
| 2025 | RMB 819.361 billion | Final expenditure; below budget |
| 2026 | RMB 873.99 billion | Budget; 6.7% above the 2025 budget |
The Ministry of Finance’s 2026 report also records 2025 national general public budget revenue of RMB 216,044.88 billion, down 1.7% year over year, and expenditure of RMB 287,395.42 billion, up 1%. It reports a deficit of RMB 5.66 trillion. These national general-public-budget totals are not the same measure as central debt-interest spending.
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How growth-support spending fits the picture
The U.S. Treasury’s January 2026 foreign-exchange report describes Chinese authorities as planning a substantial spending expansion to support growth. Through the second quarter of 2025, spending from China’s government funds and general public budgets grew nearly 9% year over year, while government revenue fell 0.6%.
The Treasury links weaker revenue to soft tax and property-related receipts amid downward price pressures and the prolonged real-estate downturn. It says higher bond issuance supported infrastructure spending, subsidies for purchases of consumer durables, payments of government arrears to private firms, and refinancing of off-balance-sheet local-government debt.
The report estimates China’s overall 2025 deficit across four budget systems at 10.9% of GDP. That is the Treasury’s estimate using a broader measure; it should not be confused with the Ministry of Finance’s RMB 5.66 trillion general-public-budget deficit.
Why the budget line is not a complete measure of public debt costs
China’s general public budget captures only part of the fiscal system. CSIS ChinaPower notes that government funds, state-capital operations, and social-insurance fund budgets are separate components. The general-public-budget interest line therefore cannot be treated as a comprehensive tally of interest on all local-government financing vehicles or other implicit liabilities.
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This matters when interpreting both the size of the reported interest burden and its growth. The 341% comparison is specifically about the general-public-budget debt-interest category; it is not an estimate of every liability that may ultimately involve public resources.
Is Beijing borrowing to support growth?
The evidence supports a cautious answer: growth-support measures and increased borrowing are part of the fiscal context, but the budget figures alone do not prove that every borrowing decision or state-bank loan was made for that purpose. Mark Williams, chief Asia economist at Capital Economics, offered that interpretation in a quotation published by Fortune on October 11, 2026. Williams said: “The irony is that one driver of both government borrowing and the lax lending standards of [state-owned] banks is the desire to prop up economic growth and prevent job losses,” and added that the result of the credit boom was “a banking system propping up unproductive firms, widespread losses across industry, and entrenched overcapacity.”
That is an economist’s analysis of incentives and consequences, not an official finding about every loan. The budget data show a fast-growing interest allocation alongside fiscal measures intended to bolster activity; they do not establish that interest payments themselves caused weak growth.
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