The number of defaulters in China has hit a new high since the pandemic. According to data from the China Enforcement Information Disclosure Network as of last Saturday (December 2), the number of judgment defaulters in China reached 8,542,322, an increase of nearly 50% from 5.7 million at the beginning of 2020.
According to the Financial Times, most of the more than 8.54 million defaulters who failed to repay their housing and business loans on time are between the ages of 18 and 59, accounting for 1% of China's working population.
China refers to these dishonest people as "old men." According to China's relevant regulations, those on this blacklist face a number of mandatory restrictions, including restrictions on buying air tickets and staying in star-rated hotels.
According to the analysis, the increase in "old people" shows that the epidemic lockdown and other restrictions have affected economic growth and reduced household incomes, and it is also a consequence of Chinese consumers' excessive borrowing.
China's household debt-to-gross domestic product (GDP) ratio has nearly doubled over the past decade, reaching 64% in September 2022, according to the National Finance and Development Laboratory.
As wages stagnate or even negative growth, people's financial pressures have intensified, and more and more people have started to stop paying their bills. According to China Merchants Bank, bad credit card debts that are 90 days overdue in 2022 increased by 26% compared to the previous year. In the first nine months of this year, the number of housing seizures in China increased by nearly one-third year-on-year, according to the China Index Research Institute.
Hang Seng China's chief economist** pointed out that the rise in defaults is a cyclical and structural problem, and "the situation is likely to worsen until the situation improves".