Rising household debt in China is an overlooked risk which is a major hidden danger to China's economy, warns Global Times. China's medium and long-term household loans reached CNY21.8tn ($3.2tn) by the end of April this year, accounting for 20% of loans in the country, and as of the end of 2016, household debt-to-GDP ratio reached 44.4%, however if you take into account provident fund loan data it is expected to be around 60%. The Chinese government has been trying hard to reduce its massive public debt, but with interest rates at record lows and inflation still high, there are concerns that households will not have enough money left over after paying
Rising household debt in China is an overlooked risk which is a major hidden danger to China's economy, warns Global Times. China's medium and long-term household loans reached CNY21.8tn ($3.2tn) by the end of April this year, accounting for 20% of loans in the country, and as of the end of 2016, household debt-to-GDP ratio reached 44.4%, however if you take into account provident fund loan data it is expected to be around 60%. If household debt continues to rise at its current levels the mortgage balance-to-disposable income ratio in China could reach US pre-crisis peak as early as 2020.