Fed’s Kaplan: China’s GDP Target Seems to Indicate Increased Debt Ratio, According to Reuters

China’s economic growth target seems to have led to increased levels of debt relative to its GDP, according to Robert Kaplan, President of the Dallas Federal Reserve Bank, speaking in Shanghai on Thursday.

Earlier in Beijing, Kaplan noted that he is closely observing the effects of slowing growth, significant overcapacity, and high debt levels in major economies outside the United States on economic conditions domestically.

China has set an ambitious GDP growth target of between 6.5 percent and 7 percent for the current year.

The International Monetary Fund reported that China’s total debt reached 250 percent of GDP in 2015, which could hinder future growth.