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Coronavirus: a global consumer default wave is just getting started in China
- Overdue credit-card debt in China rose by about 50 per cent in February, bank executives say
- Issues in world’s second-largest economy ‘are a preview of what we should expect throughout the world’, says research fellow at the Peterson Institute for International Economics in Washington
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Like millions of people around the world, Zhang Chunzi borrowed money she thought she would be able to repay before the coronavirus changed everything.
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Now laid off from her job at an apparel exporter in Hangzhou, the prosperous capital of east China’s Zhejiang province, the 23-year-old is missing payments on 12,000 yuan (US$1,700) of debt on her credit card and an online lending platform operated by Ant Financial.
“I’m late on all the bills and there’s no way I can pay my debt in full,” Zhang said.
Ant Financial is an affiliate of Alibaba Group, which also owns the South China Morning Post.
Zhang’s story is playing out in similar ways across China, where the virus outbreak has been taking lives and ravaging the economy for more than three months. As Covid-19 works its way through the rest of Asia, Europe and the Americas – forcing countries into lockdown, driving up unemployment and pummeling small-business owners – analysts say it is only a matter of time before stretched households globally start to default on their loans.
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