A senior China central bank adviser warned that the rising US debt burden looks unsustainable, as concerns mount over America’s fiscal outlook.
Summary:
-
SCMP reports China adviser flags US debt concerns
-
Huang Yiping questions sustainability of US debt path
-
Fiscal discipline seen as unlikely near term
-
Jason Furman echoes deficit worries
-
US debt hits US$38.4 trillion in 2025
According to reporting by the South China Morning Post (may be gated), a senior adviser to China’s central bank has publicly raised doubts about the sustainability of the United States’ rapidly expanding public debt, adding to growing international unease over Washington’s fiscal trajectory and the potential for global spillovers.
Speaking at an academic forum this week, Huang Yiping, an adviser to the People’s Bank of China and a member of its monetary policy committee, said the steady rise in US debt relative to GDP appeared increasingly difficult to sustain. Huang warned that the current political and institutional environment in the United States makes a return to fiscal discipline unlikely in the near term.
“I’ve heard so many people telling me that [debt] as a share of GDP has been rising and probably will continue to rise. That’s probably not sustainable,” Huang said, according to the SCMP. He added that the style of presidential policymaking and the broader institutional framework in the US reduce the likelihood that meaningful deficit control will be implemented anytime soon.
Huang made the remarks during a discussion with Jason Furman, a Harvard professor and former senior US economic policymaker, at a forum on Chinese and American economic relations organised by the East Asian Institute at the National University of Singapore.
Furman broadly echoed Huang’s concerns, describing the US fiscal outlook as troubling and the deficit as “clearly too large.” He warned that the debt trajectory is on an increasingly unsustainable path, adding that any meaningful reduction in the US budget deficit would likely have significant external consequences. Furman suggested that roughly half of any fiscal adjustment could flow through to the current account, while alternative adjustment paths — such as higher savings or reduced import consumption — would likely require weaker economic activity.
The comments come as US government debt climbed to US$38.4 trillion by the end of 2025, up roughly US$2.23 trillion from a year earlier, according to data from the US Congress Joint Economic Committee. The scale of the debt increase has intensified scrutiny from global policymakers, particularly in economies that hold large volumes of US assets.
h/t to Martin Whetton, who leads the Westpac financial markets strategy team
