Core Viewpoint - The macro leverage ratio in China has risen significantly, reaching 300.4% in Q2 2025, indicating a growing debt burden associated with economic growth [2][3][4]. Group 1: Macro Leverage Ratio Trends - China's macro leverage ratio increased from 298.5% in Q1 2025 to 300.4% in Q2 2025, marking the first time it has exceeded 300% [2]. - By the end of 2024, the macro leverage ratios for China, Germany, Japan, and the U.S. were projected to be 286.5%, 198.6%, 387%, and 249.3% respectively, with China showing the most significant increase [3]. - The rise in China's macro leverage ratio is attributed to the debt growth outpacing nominal GDP growth [3]. Group 2: Sectoral Analysis of Leverage - The leverage ratio of non-financial enterprises in China has shown a pattern of "rise-fall-rise," with a notable increase since 2022, reaching 139.4% by Q3 2024 [4][5]. - In contrast, the leverage ratios of non-financial enterprises in Germany, Japan, and the U.S. have experienced a "rise-fall" trend, with a decline expected by the end of 2024 [4]. - Government leverage in China has increased from 59.6% at the end of 2019 to 88.4% by the end of 2024, while the government leverage ratios in Germany, Japan, and the U.S. have shown a decline after initial increases [5][6]. Group 3: Economic Growth and Debt Relationship - The relationship between economic growth and leverage is highlighted, with the assertion that faster GDP growth could lead to a reduction in government leverage ratios [10]. - Despite China's actual GDP growth outpacing that of the U.S., the nominal GDP growth has been slower, contributing to the rising leverage ratio [11]. - The nominal GDP growth has been hindered by low price levels, which negatively impacts the overall economic growth and leverage dynamics [12]. Group 4: Policy Implications and Recommendations - The need to lower local government leverage has been recognized, with various measures already implemented to address local hidden debts [14]. - Improving the efficiency of policy resource utilization is essential for stabilizing growth and addressing structural economic issues [14][15]. - The focus on enhancing human capital and technological advancement is crucial for improving labor productivity and overall economic performance [16][18].