Business, Financial & Forex news

Consumers in China took a record number of loans

Total debt in the economy of The Celestial Empire exceeds 260% of GDP  of China continues to demonstrate a debt model of development. The latest figures from the National Bank of China shows that in November residents of this country took loans in banks 1.7 times more than in October. In total for the reporting month, China’s individuals have totaled 1.12 trillion yuan more, which is equivalent to 169 billion dollars. The debt of households is more than 42% of GDP, and the total debt on the economy exceeds 260% of GDP. Attention is drawn to the state of the real estate market in China, which is clearly overheated: the cost of a house in Shenzhen, for example, an average of 44.4 times the annual income of the average family in this city.

For comparison, the same figure in the US city of New York is much smaller, almost four times. The price of one square meter of housing in China this year increased compared to last year by 10%. Debts on mortgages account for two-thirds of the average family in China, while in the United States this share is less and is 55%.
Thus, despite the formally high welfare growth – with GDP per capita of $ 780 in 1997 to the current $ 8,100 – the reverse side of China’s economic growth was the increase in total debt in the economy.