China’s young people are in debt due to the Internet’s promotion of excessive spending and the convenience of online loans. In addition to political factors, Zhongnanhai is unhappy with Ant Group’s preoccupation with “young leeks”. Foreign media reported that Ant Group’s Alipay alone has $267 billion in short-term loans outstanding, accounting for up to 20 percent of China’s short-term household debt.
The Wall Street Journal reports that consumption is the growth engine of China’s economy, especially with the help of China’s tech finance giants, which have greatly encouraged young people to overspend, while Ant and other Chinese financial technologies have provided unsecured loans to millions of people without credit cards, making it easy for young people to use credit to buy Luxury goods and go to fancy restaurants.
The report noted that Ma-controlled Ant Financial Services is China’s largest online provider of short-term consumer loans, with Alipay’s short-term outstanding loans reaching $267 billion as of June last year, accounting for nearly one-fifth of China’s total short-term household debt.
Moreover, in the 12 months ended last June, about 1 billion Chinese citizens used Ant’s personal loan services, “Hua Chan” and “Debit Chan” (meaning “spend money” and “borrow money”). “borrow money”). Officials have slammed the fintech company for allowing people to borrow excessively, leading to a debt trap for low-income and young people.
Young people in China have been led into debt by the Internet’s promotion of overspending and the convenience of online loans. (Reuters)
Mona Wang, 27, owes the equivalent of more than $15,000, or about 15 times her monthly income, to various online loans and banks, including Ant Hua Bei, which she uses to buy designer brands, while Yuzhang Wang, 26, owes more than $30,000, including Hua Bei, which she also used to buy luxury goods and expensive dinners.
The fact that young Chinese people are in debt has also been the focus of attention at this year’s National People’s Congress, which blasted fintech platforms for encouraging young people to overspend. As a result, months after Ant Group was again overhauled by the Chinese Communist Party, Ant Financial has drawn up a plan for a digital financial overhaul, announcing on the 13th that it will lend responsibly and will not provide loans to young and low-income borrowers in excess of the amount needed for their basic living expenses.
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