Posted on 11/28/2016 8:35:42 AM PST by TigerLikesRooster
Surging homeowner loans in China raise alarms over debt
→Business Nov. 28, 2016 - 06:30AM JST
BEIJING ?
Chinese household debt has risen at an “alarming” pace as property values have soared, analysts say, raising the risk that a real estate downturn could send shockwaves through the world’s second largest economy.
Loose credit and changing habits have rapidly transformed the country’s famously loan-averse consumers into enthusiastic borrowers.
Skyrocketing real estate prices in major Chinese cities in recent years have seen families’ wealth surge.
But at the same time they have fuelled a historic boom in mortgage lending, as buyers race to get on the property ladder, or invest to profit from the phenomenon.
Now the debt owed by households in the world’s second largest economy has surged from 28 percent of GDP to more than 40 percent in the past five years.
“The notion that Chinese people do not like to borrow is clearly outdated,” said Chen Long of Gavekal Dragonomics.
The share of household loans to overall lending hit 67.5 percent in the third quarter of 2016, more than twice the share of the year before.
/snip
The ruling Communist party has set a target of 6.5 to 7 percent economic growth for 2017, and the country is on track to hit it thanks to a property frenzy in major cities and a flood of easy credit.
But keeping loans flowing at such a pace creates such “substantial risks” that it could be a “self-defeating strategy”, Chen said.
China’s total debt?including housing, financial and government sector debt?hit 168.48 trillion yuan ($25 trillion) at the end of last year, equivalent to 249 percent of national GDP, according to estimates by the Chinese Academy of Social Sciences, a top government think tank.
(Excerpt) Read more at japantoday.com ...
P!
I know a Kenyan economist that will be available to help them out in a couple of months.
I know this is Japan today. Likely an outlier but this is what the headlines are going to read now that bo is out -leaving an ecomic disaster in his wake
Suddenly 90 million people out of work, 20 trillion in debt, young adult unemployment will be a story.
Well, trump is aware of the media and it’s lies. In fact his idea of a press secretary will leave tge old ways way. Ehind, I’m guessing
Printed, unbacked money and central banks are how central planners in USA, Europe, China and elsewhere achieve their political goals.
They’re trying to do what we started in the 1950’s: An economy based on debt rather than production.
A taste of material comfort appears to be universally addictive.
This makes me laugh, to talk about Chinese mortgage debt, because under communism, there is no private ownership in the first place. Just noting how China has moved away from communism, though they are still officially communist.
Plenty of empty places for people to move into.
China’s ghost city: Kangbashi, Ordos full of brand new, empty buildings
http://www.news.com.au/travel/travel-ideas/chinas-ghost-city-kangbashi-ordos-full-of-brand-new-empty-buildings/news-story/6a2a91176e2fb27c9ee273671e85cbe8
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