Black Swan Chronicles: American-Style Credit Card Debt Default Starting In China
Of course, when you start a credit flood, this is to be expected… But yet, China is climbing into another American-style issue: defaults on credit card debt are rising by 131 %. Nice to see that the US have succeeded in exporting their irresponsible behavior to other countries.
Credit card debt in China at least six months overdue rose 131.3 percent year on year in the second quarter of 2009 to 5.77 billion yuan ($845.24 million), the People’s Bank of China, the central bank, said Wednesday.
Debts overdue by six months or more accounted for 3.1 percent of the total outstanding credit card debt at the end of June, or 0.7 of a percentage point more than in the same period last year.
The bank warned of potential risks of increasing overdue credit card debt as banks expanded the business.
By June 30, China’s banks had issued 162.62 million credit cards, or 0.12 per person, up 32.9 percent from a year earlier.
In the first quarter this year, credit card debt at least six months overdue rose 133.1 percent from a year earlier to 4.97 billion yuan.
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Sean
“Nice to see that the US have succeeded in exporting their irresponsible behavior to other countries.”
That’s a bit opinionated, don’t you think? Or did the news article have that exact quote?
Or could this quote, “By June 30, China’s banks had issued 162.62 million credit cards, or 0.12 per person, up 32.9 percent from a year earlier,” have more to do with the problem?
Caldera, I was expressing indeed an opinion at that point.
But the principle of irresponsible credit distribution to penniless people originates in the US, not in China.
China is merely replicating the US phenomenon, albeit on a shortened scale.