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The level of household debt in China is increasing and is getting near to the International Monetary Fund (IMF) alert threshold, which denotes the possibility of a financial disaster, writes The South China Morning Post newspaper in Hong Kong.
The People's Republic of China's National Institute of Finance and Development estimated the total household debt in China to be 61.9% of the country's GDP by the end of 2022.
In contrast, by the end of the second quarter of 2023, this percentage increased to 63.5%, which is quite close to the IMF threshold of 65% and signals the advent of financial concerns.
According to the article, mortgage lending accounts for the majority of household debt in China, which by the end of June totaled 38.6 trillion yuan (about $5.38 trillion). Loans for consumer items, credit card debt, private loans, and loans to businesses to sustain their operations are all included.
source: scmp.com
The People's Republic of China's National Institute of Finance and Development estimated the total household debt in China to be 61.9% of the country's GDP by the end of 2022.
In contrast, by the end of the second quarter of 2023, this percentage increased to 63.5%, which is quite close to the IMF threshold of 65% and signals the advent of financial concerns.
According to the article, mortgage lending accounts for the majority of household debt in China, which by the end of June totaled 38.6 trillion yuan (about $5.38 trillion). Loans for consumer items, credit card debt, private loans, and loans to businesses to sustain their operations are all included.
source: scmp.com