By Hong Soon-do, Beijing correspondent, AsiaToday - China's debt is the weak spot of Chinese economy and is escalating fast. If the debt levels continue to spiral out of control, the already weak economy will likely to be hit hard. Some global think tanks believe that China's economy will face tougher time than Korea's and even Japan's.

China's central-government debt doesn't seem like a big problem, superficially. According to Chinese state media reports on Sunday, China's central government debt ratio is only 40%, or $4.1 trillion. This is why the Ministry of Finance of China has recently revealed with confidence that the government debt levels are still low compared with other major economies and it has the capacity to invest in infrastructure through credit expansion.

A cartoon that shows the reality of China's debt./ Source: search engineBaidu

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However, things are totally different if you take a closer look at other debts. Most of all, China's local-government debt that the central government should virtually pay, is as much as 90% of GDP. Some economists claim that the size of the debt is higher than 100% because local governments are cheating with the size of their debts.

The most worrying debt in China is held by the corporate sector. The corporate debt-to-GDP ratio is 162% of GDP, and total corporate liabilities up to 200% of GDP when including corporate debt securities. Household debt problem is a little better. It is calculated at around 35%.

Nevertheless, it doesn't stop the situation of China's total debt load. According to a new report by the McKinsey Global Institute, China's debt has reached 282% of GDP, lower than Japan (400%) and yet higher than the United States (269%).

The problem lies in the fact that the size would increase further if you find all the hidden liabilities. China's debt-to-GDP might be as high as 350%, according to Macquarie Research. Yet, the more dreadful fact is that China's debt grows at an average rate of a whopping 83% per year, which is not even comparable with the United States with 16%.