According to foreign news reports, the past five years, China’s residents’ debt ratio is growing rapidly in the global forefront, credit card debt has surpassed the United States. Chinese financial scholar He Jiangbing pointed out that there are several reasons for the sharp rise of China’s residents’ debt, including the decline of China’s economic growth in recent years, people’s income decreased, borrowing more money to live; rising property prices also led to the rise of residents’ debt level; consumption of commodities also rose significantly, including the purchase of new cars, and other burdens only increased, such as pensions, education and medical expenses.
Zhou Qiong, general manager of the strategic development department of China Postal Savings Bank, recently issued an article pointing out that, using the statistics of the Bank for International Settlements (BIS), the leverage ratio of Chinese residents was 61.1% as of the third quarter of last year, ranking 22nd among 43 major countries in the world, but the increase over the past five years reached 22.2%, topping all countries, far exceeding the 0.9% of the United States, 7.2% of Japan and 4% of Germany.
China’s residents’ indebtedness is soaring, and property prices are only going up, not down, which is surprisingly the main factor. According to the New York-based CEIC, property prices in China rose by an average of 7.5% per month between 2015 and 2019. China’s property market continues to expand and has long defied the laws of market development.
Statistics from the People’s Bank of China show that as of last year, the balance of personal housing loans in China was about RMB 34.4 trillion, accounting for 54.5% of personal loans, meaning that more than half of China’s personal debt is home loans. By the end of last year, the balance of credit cards payable in China was 7.91 trillion yuan, nearly 1.5 times the balance of credit card loans in the United States, according to the Federal Reserve Bank of New York.
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