China's consumer debt crisis: 100 million struggle, 454bn yuan unpaid
China is in the middle of a major debt problem: about 100 million Chinese consumers could be finding it difficult to service their personal debt.
This wave of defaults is fueling a distressed-debt market, all made worse by a slowing economy and job losses.
Since 2021, unpaid consumer loans have exploded, reaching 454 billion yuan by 2025.
Credit cards drive distressed debt sales
Most of this distressed debt comes from things like credit cards.
Banks are offloading risky loans to distressed-asset managers, who then rely on debt-collection companies, but new rules capping interest rates and limiting fresh credit are making things tougher for everyone involved.
With more people losing jobs or earning less, paying off debts has become even harder, and the financial pressure just keeps growing.