Andrew Polk, Columnist

Chinese Need to Learn to Save Again

After decades of thrift, they're taking on too much personal debt.

February 15, 2018 at 2:36 AM UTC

Andrew Polk is a founding partner of Trivium/China, a Beijing-based research firm, which produces a daily newsletter on China. He was formerly director of China research at Medley Global Advisors and chief economist at the Conference Board's China Center.

Skyrocketing home prices have driven much of the debt surge.
Photographer: Qilai Shen/In Pictures Ltd./Corbis/Getty Images

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

For years, economists and policymakers have hailed the propensity of Chinese to save. Among other things, they’ve pointed to low household debt as reason not to fear a financial crash in the world’s second-biggest economy. Now, though, one of China’s greatest economic strengths is becoming a crucial weakness.

Over the past two weeks, as they’ve held their annual work meetings, China’s various financial regulatory bodies have raised fears that Chinese households may be overleveraged. Banking regulators sound especially concerned, and understandably so: Data released Monday showed that Chinese households borrowed 910 billion renminbi ($143 billion) in January -- nearly a third of all RMB-denominated bank loans extended that month.