China’s Debt Bomb Is About to Explode – The End of the Yuan

It has become impp9ssible to unearth any truth.  We do not know and fiat money collapses have happened in the past ,but usualy because the managers lost theri nerves.

if it is allowed to run foreve, how does it collapse? I do not think we know.  Recall that paid off debt contracts the money supply itself at a greater level thast the original float.  A debt holiday also does this.

China today could reduce all mortgage principle by ten percent per year.    This may work.

China’s Debt Bomb Is About to Explode – The End of the Yuan

When a country’s finance minister admits on live TV:

“Every penny we spend is borrowed,”

…it’s not a warning.

It’s a confession.

Last week, at a September 2025 press conference, China’s Finance Minister basically told the world:

“We’re broke.”

Here’s why this matters — and why the yuan collapse might be closer than you think.

https://www.linkedin.com/posts/kenlovestaiwan_chinas-debt-bomb-is-about-to-explode-the-activity-7375911960443326464-VRaY/?

The Brutal Math

Official debt (2024): 92.6 trillion yuan

GDP (2024): ~126 trillion yuan → Debt = 73% of GDP

Per capita: 66,000 yuan of debt per citizen, including newborns.

But these are Beijing’s official numbers — and they’re cooked.

Hidden local government debts add another 60 trillion yuan, pushing real debt past 150 trillion.

And the GDP itself is inflated, meaning the true debt-to-GDP ratio is far worse.

A Ponzi Scheme in Action

To stay afloat, Beijing issues new bonds to pay old ones.

In August 2025 alone: 4 trillion yuan in “special refinancing bonds.”

Interest costs are exploding:

2.9% (2019) → 10% (2025 projected)

For every 10 yuan borrowed, 1 yuan goes straight to interest.

Who Pays the Price?

Not the elites.

Ordinary Chinese families pay through:

Late salaries for civil servants

Missing pension checks

Hospitals running out of medicine

Even the “iron rice bowl” jobs aren’t safe anymore.

The U.S. vs. China Debt Difference

Some will say: “But the U.S. has huge debt too!”

True — but here’s the difference:

The U.S. dollar is the world’s reserve currency.

When Washington prints money, global markets absorb the shock.

America enjoys an “exorbitant privilege” that a country like China will never have.

The yuan, by contrast, has zero international trust.

If Beijing prints money, the pain stays inside China, triggering hyperinflation instead of a bailout.

That’s why a Chinese debt crisis is far more dangerous — there’s no external safety valve.

The Death Spiral

China’s economy is freezing up:

Real estate sales plunged 8.5% in 2024, the lowest in history.

70+ industries tied to housing are collapsing.

Local governments’ land sale revenues — once their lifeblood — have evaporated.

New industries like EVs and solar?

Blocked by Western tariffs, leaving warehouses packed with unsold goods.

No growth → less revenue → more borrowing → higher interest → even lower credit.

Classic collapse spiral.

Three Nightmare Scenarios

There are only three ways out:

1. Currency Crash: Life savings wiped out overnight.

2. Tax Tsunami: Everyone squeezed, from billionaires to street vendors.

3. Social Cuts: Pensions and healthcare gutted.

Beijing’s choice? #1 — Currency Crash.

Inflation is the quietest way to steal from the people without sparking immediate unrest.

The Coming Yuan Collapse

The IMF warns China’s growth could fall below 2% by 2026 —

that’s Japan’s Lost Decade on steroids.

My own analysis is that China has been shrinking for years with negative GDP growth.

China is living on a maxed-out national credit card.

And the bill is coming due — fast.

See content credentialsActivate to view larger image,