What makes the Chinese people carry heavy debts? The recent controversial reports will focus on the “advanced consumption” of young people, arguing that irrational consumption habits make young people’s debts more and more heavy.

 

This is of course one of the reasons. The rise of consumerism in recent years and the widespread acceptance of “credit ahead consumption” by young people do have the problem of debt-ridden problems caused by irrational consumption. However, the real reason for the high debt of the Chinese is the mortgage.

 

In particular, the rise in housing loans in 2016-2017 stems from the speculative behavior of some families and leveraged home purchases. On the other hand, it stems from the fact that some young families are concentrated in the market ahead of the fear of “can’t buy without buying”. A lot of speculative behavior, coupled with the fact that young families have to increase the scale of borrowing because they bought houses in advance, has led to a rapid expansion of the debt of Chinese residents.

 

In April 2018, a report by HSBC said that the housing ownership rate of China's “millennials” (ie, after 80s and 90s) reached 70%, while 40% of young people bought houses by their parents. There are more and more young people buying houses, but most of them have to rely on their parents' deposits to provide down payment, and they have to pay for loans every month. This will inevitably reduce the deposits of the older generation and lead to an increase in the leverage ratio of young people and an increase in the difficulty of deposits.

 

The China Household Finance Report also shows that in the housing mortgage participation rate, the debt participation rate of young families under 30 is close to the debt participation rate of middle-aged people aged 30-44. Other age groups.

 

These data all reflect that the young people group has indeed become a major member of the debt family, but the main cause of debt is not “irrational consumption” but real housing pressure.

 

The report "China's young people borrowing money to cause debt concerns" quoted data from China Investment Bank CICC, which showed that China's consumer loans last year - used for car purchases, vacations, home renovations and expensive home purchases Supplies - the outstanding balance increased by nearly 40%, reaching 6.8 trillion yuan.

 

Anyone familiar with the 2016-2017 property market knows that many consumer loans are not actually invested in the consumer sector. In other words, the extra short-term consumer loans actually turned into a down payment.

 

According to the report “Research on the phenomenon of short-term consumer loans flowing into the property market in the country”, according to the year-on-year trend of social retail sales, from March to September 2017, the amount of abnormal short-term consumer loans increased by about 370 billion yuan, and at least 300 billion of them are estimated to flow. The property market, while the total amount of new short-term consumer loans during the same period was about 100 billion.

 

Behind the value-added of real estate wealth is the sharp increase in the debt ratio of Chinese residents. The Chinese have enjoyed the feast of wealth and bear the ultimate debt.