Household Debt

According to a survey conducted by the Institute for Advanced Research at the Shanghai University of Finance and Economics, China's household debt increased to 44.4 percent of GDP in 2016 from 30.7 percent in 2013, a growth rate higher than that of the US before the sub-prime crisis in 2008. Statistics from the National Institution for Finance & Development show that the Chinese household leverage rate climbed to 48.6 percent in the third quarter of 2017, up from 47.4 percent in the second, leading to a fall in consumption and growing risks. Housing and mortgage loans are the main components of household debt in China. More than one-third of Chinese families are debt-ridden and if the debt ratio continues to grow, banking and macro economic sectors are expected to be deeply affected. At a time when corporate and local government debts are in the spotlight, China's household debt is largely neglected.