The global debt total has exceeded $315 trillion, and the world is being engulfed by debt.

The world is facing an unprecedented debt crisis, with the total global debt in 2024 exceeding $315 trillion, far surpassing the global GDP of $109.5 trillion.

This means that global debt levels have reached three times the GDP.

Based on the current global population of 8 billion, this averages to nearly $39,000 of debt per person, a figure that is deeply thought-provoking.

Who primarily constitutes this massive debt?

Specifically, what is the situation with China's debt?

How did these debts come about?

Global debt is primarily divided into three major categories: household debt, corporate debt, and government debt.

Household debt includes mortgages, credit loans, and student loans. As of early 2024, the total global household debt is about $59.1 trillion, accounting for a relatively small proportion.

Corporate debt totals $164.5 trillion, while government debt reaches $91.4 trillion.

Although corporate debt makes up a significant portion of the overall debt, financial institutions account for $70.4 trillion of this, including banks, insurance companies, and fund companies.

These financial institutions often use leverage to amplify returns, but this also comes with enormous risks, as many financial crises in history have been triggered by such institutions.

Debt is not entirely without benefits.

Borrowing can help individuals realize homeownership and access better education ahead of time, help companies expand, and provide governments with funds for economic development and crisis management.

However, government debt often sparks controversy because it not only restricts fiscal policy but can also lead to economic instability.

The debt-to-GDP ratio is an important indicator of a country's debt health.

For instance, although two countries may have the same debt size, differences in their debt-to-GDP ratios can result in completely different fiscal pressures and economic performances.

Among the $315 trillion global debt, the top three are the United States, China, and Japan.

In 2024, the U.S. debt exceeds $62.2 trillion, with government debt making up the majority.

In comparison, China's social financing scale reached 389.93 trillion RMB as of April 2024, equivalent to about $53.8 trillion, indicating a high debt level.

Japan, the world's fourth-largest economy, has government debt exceeding 263% of its GDP, primarily due to increased social security expenditures caused by an aging population.

Since the 1950s, the world has experienced four major debt crises, including the Latin American debt crisis of the 1980s, the Asian financial crisis of 1997, the global financial crisis of 2008, and the global debt wave since 2010.

Although previous crisis experiences have made governments more adept at responding, the continuous growth of global debt, coupled with a strong dollar and trade war uncertainties, still could push some countries towards the brink of debt default.

While debt is necessary in certain situations, excessive debt will have severe impacts on a country's economy and society.

High debt levels may force governments to cut spending in crucial areas such as education and healthcare to maintain debt repayment capabilities, as vividly demonstrated during the Greek debt crisis.

The global debt issue has become one of the major challenges facing the current global economy.

Governments need to weigh the pros and cons when handling debt issues to ensure sustainable economic development and social stability.