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China releases 2018 national balance sheet
Photo: Reuters
 
China’s national balance sheet 2018 was released on Wednesday, which shows that the Chinese government boasts a large amount of net worth which could help it withstand risks.

From 2011, the research team with the Chinese Academy of Social Sciences began to work on a series of books on China’s national balance sheet. The 2018 edition, the third book in the series, mainly analyzes the situation of China’s assets, liabilities and wealth between 2000 and 2016.

The 2018 book focuses on scale, distribution, financing efficiency and debt risks in China’s national assets.

By the end of 2016, China’s net worth combining non-financial assets and stocks outstanding stood at 437 trillion yuan, which equaled to 70.7 percent of the US net worth during the same period, ranking the second in the world, according to the book.

The study also shows that in 2016, 73 percent of the country’s net worth was owned by the household sector, while the remaining 27 percent belonged to the government sector. The book points out that a distinguishing feature of China’s economy is that the government sector owned a large amount of social net worth, considering the UK and US governments all registered negative equity in the same year while the Japanese and German governments owned less than 5 percent of national net worth.

The authors argue that it is the large sum of assets owned by Chinese government that had emboldened it to address risks. However, on the other hand, the governmental holding of large amount of assets also drags down an economy’s efficiency. “In the long run, China needs to more efficiently use and reallocate the assets, push forward reform of state-owned companies and close the ‘zombie’ ones.”   

 


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