Latest news with #debt crisis
New York Times
5 days ago
- Business
- New York Times
Chinese People Are Known to Be Big Savers. Many Are Drowning in Debt.
China is a nation of savers. The Chinese government wants its people to spend more and save less. It also wants them to take on more debt, all for the sake of saving the economy from a four-year slump. The national financial regulator urged banks in March to expand consumer lending and offer more flexible repayment terms. Last month, policymakers promised to provide 'innovative' financial services to boost consumption. Yet many Chinese consumers are wary. An alarming number of them are already defaulting on their debt. From 2021 to 2024, China's total household savings grew 50 percent, as people scared off by a big decline in housing values stuffed their money in banks. During the same period, the number of loans that households could not afford to pay back nearly doubled. For Beijing, expanding access to credit may seem like a quick way to stimulate the economy. But this push for consumers to borrow risks deepening a growing personal debt crisis. Many borrowers, particularly young people, are caught in cycles of debt, driven by poor financial literacy, high youth unemployment and stagnant wages. Those caught in the cycle run the gamut: factory workers, young professionals and gig economy workers. They are people who barely make ends meet while living in fear of default, calls from debt collectors and an overwhelming sense of shame. Want all of The Times? Subscribe.
CNA
31-07-2025
- Business
- CNA
China manufacturing sinks again in July as US trade talks stall
China has struggled to maintain a strong economic recovery since the pandemic, as it fights a debt crisis in the crucial property sector, chronically low consumption and elevated youth unemployment. A spate of natural disasters has also hit the country this summer, with at least 48 people killed and tens of thousands evacuated this week as northern China endured some of its worst floods in years. "While the statistics bureau partly attributed the decline to weather-related disruptions to production, the breakdown suggests that demand has softened too," Zichun Huang, China economist at Capital Economics, said. "The new export orders index dropped back as high tariffs began to weigh again," Huang added. "More of the current weakness in demand appears to be domestic in nature," she said. China's bruising trade war with the United States - now on hold pending a deal - has hit the export-dependent economy. Beijing and Washington called a 90-day truce on the staggeringly high duties in May, and held two days of talks this week aimed at avoiding their reimposition on Aug 12.
