The number of insolvent debtors is increasing
According to fresh legal statistics, a full of 8.54 million people, most of whom aged between 18 and 59, have been placed by the authorities on the alleged "black list" for failing to pay mortgage, commercial and another loans. That's about 1% of all adult Chinese.
At the beginning of 2020, the number of people with permanent problems with the regulation of commitments was 5.7 million.
According to Chinese law, people who neglect to comply with their obligations and are on a "blacklist", cannot take on a number of economical activities and usage any services, cannot buy airline tickets and high-speed railways, cannot make payments through mobile applications, cannot work in the state administration, cannot carry out stock exchange transactions, cannot execute public trust functions, etc.
The listing procedure shall be activated by local courts after the borrower is sued by creditors and subsequently fails to meet the agreed payment deadlines.
According to experts from think–tank National Institution for Finance and improvement (chin. 国家金融与发展研究所), the increase in the number of debt holders in China is the consequence of the mad borrowing of Chinese consumers.
Household debt as a percent of gross home product almost doubled in the last decade, reaching 64% in September.
Financial commitments are becoming an expanding burden on households due to a deficiency of wage increases and economical slowdown.
The increasing number of indebted people increases the difficulty of building consumer assurance in China, the second largest economy in the planet and the key origin of global demand.
According to analysts China Merchants Bank (chin. 中国招商银行) in September this year, the value of irrecoverable loans drawn by payments of credit cards, which were expired by at least 90 days, increased by 26 percent in 2022 compared to the erstwhile year. In turn, the China Index Institute (chin. 中国指数研究院) reported that in the first 9 months of 2023 584,000 real property acquisitions for outstanding debts were recorded, an increase of almost 1 3rd compared to the erstwhile year.
In connection with this situation, the voices of experts and lawyers are increasingly frequent about the request to introduce rules throughout the country to make individual (consumer) bankruptcy possible. So far, as a test, this legal solution has been introduced only in ShenZhen (chin. 深圳), GuangDong state (chin. 广东). The introduction of consumer bankruptcy regulation in China is not simple, even due to the deficiency of transparency in individual finances or individual assets.
Source: ft.com
The most costly cities in the planet and China
According to a ranking by the Economist Intelligence Unit, Hong Kong is the 5th most costly city in the planet this year.
The study is prepared annually as a consequence of an analysis of the cost of surviving in 173 cities in the world. This includes more than 200 products and services, including food, household, individual hygiene, alcohol, tobacco, clothing, home help, recreation, transport and municipal services. This year, the maintenance cost index for Hong Kong was 98. Singapore was the first ranked most costly cities in the planet this year.
Four Chinese cities, meaning:
- NanJing (chin. 南京),
- WuXi (chin. 无锡),
- DaLian (chin. 大连) and
- Beijing (chin. 北京)
noted the biggest drop in the ranking this year. Mainly due to the crucial weakening of the yuan to the US dollar, the very slow recovery of economical vigor after the pandemic and mediocre consumption.
Beijing and DaLian dropped 26 positions to 60 places respectively with a maintenance rate of 69. On the another hand, NanJing and WuXi are in position 77 by 31 seats.
This is seemingly not bad news, as it indicates that the cost of surviving in these cities has fallen comparatively compared to last year. But in practice, it's not the residents, it's the foreigners who work in China making money in dollars...
Source: eiu.com
Author: 梁安基 Andrzej Z. Liang, 上海 Shanghai, 中国 China
Email: [email protected]
Editorial: Leszek B.
Email: [email protected]
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