The next front in China’s crackdown on debt is the one closest to home.
On the back of a boom in property prices, household borrowing has been climbing for 10 years straight, at a pace that rivals any such run-up in major economies. At $6.7 trillion, and a record 50 percent of gross domestic product, private debt is now approaching developed-world levels and crimping consumer spending power.
Take Huang Panpan, a 33-year-old public-relations executive from Beijing. Last year, he took the plunge on a 2.9-million-yuan ($460,000) mortgage on a 385-square-foot home and now faces monthly loan payments of about half of his take-home salary.
Since then, he’s been in austerity mode: cutting travel, selling stocks, putting off a car purchase as well as a plan to start his own business. "I was someone who never paid much attention to the price tags when buying things or booking trips," Huang said. "I feel more pressured financially with all that debt…"