China’s young people are in debt due to the Internet’s promotion of excessive spending and the convenience of online loans. Ant Group and Tencent (00700) have been reformed, in addition to political factors, another is that the mainland government is very dissatisfied with Ant Group’s problem of cutting “young leeks”. Foreign media reported that Ant Group’s Alipay alone has short-term outstanding loans of up to 1.74 trillion yuan (the same below), accounting for up to 20% of the mainland’s short-term household debt ratio.
The report pointed out that consumption is the growth engine of the mainland economy, especially under the boost of technology and financial giants, greatly encouraging young people to overspend, and Ant and other mainland financial technology companies to provide unsecured loans to millions of people without credit cards, young people because of the ease of loans, to credit to buy Luxury goods, high-end restaurant consumers are numerous.
Jack Ma‘s Ant Financial Services is the largest provider of short-term consumer loans online on the mainland, with 1.74 trillion yuan in short-term loans outstanding under its Alipay as of June last year, accounting for nearly one-fifth of China’s total short-term household debt, according to the report.
Furthermore, in the year ended June, about 1 billion mainland citizens used Ant’s personal loan services, “花呗” and “借呗” (which means “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.
Mona Wang, 27, owes about $100,000, or about 15 times her monthly income, to a number of online lenders and banks, including Ant Hua Bei, and spends it on designer brands. 26-year-old Yuzhang Wang owes about $200,000, including Hua Bei, and also spends it on luxury goods and expensive dinners. expensive dinners.
The fact that young people on the mainland are heavily in debt has been the focus of government attention, with criticism of fintech platforms for encouraging young people to overspend. As a result, months after Ant Group was put on hold by the mainland government, Ant Financial has drawn up a plan to overhaul its digital finance, announcing on Saturday (13) that it will lend responsibly and will not provide loans to young and low-income borrowers beyond the amount needed for their basic living expenses.