House­hold Debt Hits 48% of GDP

NewsChina - - NEWS BRIEF -

The In­sti­tute for Ad­vanced Re­search at Shang­hai Univer­sity of Fi­nance and Eco­nom­ics re­cently is­sued a re­port about sys­temic fi­nan­cial risk, warn­ing that China's house­hold debt hit 48 per­cent of GDP in 2017.

Ac­cord­ing to the re­port, by April 2017, the ra­tio of China's house­hold debt to dis­pos­able house­hold in­come grew to 107 per­cent, more than nine per­cent higher than that of April 2016 and 33 per­cent higher than six years ago. The ra­tio would be even higher if pri­vate lend- ing which is dif­fi­cult to count was in­cluded in the pic­ture.

The re­port found a dom­i­nant por­tion of the debt has flowed into the hous­ing mar­ket, warn­ing that the un­bal­anced debt struc­ture could squeeze house­hold con­sump­tion ca­pac­ity and cre­ate a neg­a­tive chain re­ac­tion on the op­er­a­tion of en­ter­prises and banks. The re­port thus ap­peals to rel­e­vant depart­ments to put house­hold debt into the State's over­all delever­ag­ing pack­age and fur­ther curb hous­ing prices.

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