Daily Management Review

Number of loan defaulters in China peaks in years


FT: A record 8.54 million borrowers in China have experienced loan default.

Xiaoshen Wang
Xiaoshen Wang
The Financial Times reports, citing government numbers, that the number of Chinese debtors facing nonpayment of loans has reached a record high, amounting to 8.54 million individuals.

According to FT, the Republic's economic slump is to blame for this.

Deng Wang, chief economist at Hang Seng Bank China, believes that "both cyclical and structural problems" are to blame for the sharp increase in the number of defaulters.

The National Institute of Finance and Development of China estimates that household debt in China has roughly doubled over the previous ten years, contributing to the debtors' crisis. However, because Chinese salaries are no longer rising or have even started to drop, it is becoming more and more difficult to service the growing debt. According to the FT, more Chinese are "struggling to make ends meet," which has led to many of them ceasing to pay their bills.

source: ft.com