China's debt-servicing costs are rising faster than any other major category of public spending, with interest payments now claiming a larger share of the national budget than in the United States as Beijing works to prop up growth.

Debt-servicing payments will account for 19.2% of the central government's general public budget this year, up from 12% in 2014, according to new Conference Board estimates cited by the Financial Times.

That tracks with a separate report published earlier this year by the Center for Strategic and International Studies (CSIS), which likewise found that 19% of Beijing's spending is earmarked for interest on debt. That is more than the 14% of the US federal budget that goes to interest costs, though less than Japan's 25.6%.

CSIS added that China's spending on interest payments skyrocketed 341% between 2013 and 2025, faster than any other major budget category. By comparison, total spending jumped 102% over that span, with outlays on social security and employment up 207%, science and technology up 137%, and defense up 141%. That arithmetic is why the share matters: when one category grows more than three times as fast as total spending, its slice of the budget expands while the room left for everything else shrinks.

US debt-interest spending looks grim as well, having surged about 390% since 2013 to $1 trillion — a figure that also tops the Pentagon's budget.

But the world's two biggest economies have been diverging in key ways, with implications for future growth and indebtedness.

The US economy is accelerating, helped by the AI boom. Despite high inflation, resilient consumers have continued to spend, unemployment is low and signals full employment, and stock markets are at or near record highs. Hyperscalers are racing to issue bonds to fund their centers and chip purchases, but they are also raising money through fresh stock offerings and IPOs.

China's GDP, meanwhile, has been decelerating and is on pace to undercut the annual target of 4.5%-5%. While export-facing sectors are growing at a fast clip, trade partners are putting up barriers, Chinese consumers remain reluctant to spend, investment is weak, the property sector is still digging out from an epic crash, and Chinese stocks have been anemic.

Beijing has also steered state banks to provide financing to priority industries such as electric vehicles, robotics, artificial intelligence, and renewable energy. Under pressure to lend, however, many loans went to questionable borrowers. Business debt has doubled since 2019, while revenues are only 30% higher. Creditors continue to roll over loans to keep struggling firms afloat, even as nearly a third of them are losing money.

China's state-led growth model now looks to be running out of steam, and the rapidly expanding mountain of debt is a warning sign, as local governments often seek to boost favored industries with low-cost loans.

According to the International Monetary Fund, China's general government gross debt — a measure that spans borrowing by central and local authorities — hit 107% of GDP this year, up from 41% in 2015 and on a path to reach 124% in 2030.

A broader measure of indebtedness across the public and private sectors reveals an even worse picture. China's total debt-to-GDP ratio, excluding the financial sector, has doubled since 2010 and now tops 300%, Capital Economics estimated earlier this year. In the US, total public and private debt was about 265% of GDP last year, down sharply from pandemic-era highs.

China's debt boom has not only hit diminishing returns — it is also becoming a drag on the economy. The interest line is where those threads converge: it measures how much of the state's annual resources are committed to servicing past borrowing before anything is spent elsewhere. From here, the indicators to watch are already in the data — whether the debt ratio continues along the IMF's projected path, how long creditors keep rolling over loans to money-losing firms, and whether business revenues close the gap with borrowing that has doubled since 2019.

"The irony is that one driver of both government borrowing and the lax lending standards of [state-owned] banks is the desire to prop up economic growth and prevent job losses," Mark Williams, chief Asia economist at Capital Economics, wrote in May. "But the product of a credit boom that has been underway for 18 years is a banking system propping up unproductive firms, widespread losses across industry, and entrenched overcapacity."

This story was originally featured on Fortune.com.