Famous for hoarding cash, Chinese families are now racking up debt on an unprecedented scale
But they still have far more savings than debts, according to researchers
Chinese families with their long tradition of saving money are now accumulating debt at a rate never been seen before, according to data compiled by a state-backed think tank in Beijing.
But the National Institution for Finance and Development also said mounting debt was not a concern because Chinese households still had far more savings than debts.
The country’s household leverage ratio – or the ratio between debt incurred by families and gross domestic product – surged to 49 per cent at the end of last year from 17.9 per cent at the end of 2008, going up about 3.5 percentage points annually, the think tank said in a report released on Thursday.
So in the period from 1993, when the data became available, to 2008, the household debt ratio went from 8.3 per cent to 17.9 per cent, with an annual rise of 0.65 percentage points.
But in 2016 and 2017, that annual increase accelerated to about 4.9 percentage points, the think tank said.
The rapid accumulation of household debt was the biggest factor behind the rise in China’s overall leverage last year, as the corporate sector’s debt ratio fell and local government borrowing was reined in, at least on the surface, it said.
