China’s Household Debt, Part II: Regional Analysis

The second installment of our analysis of China’s household debt focuses on the regional distribution of consumer credit and household borrowing. This note highlights the regions most exposed to household debt risk, and how the economic fallout of the COVID-19 outbreak will impact household borrowing across different provinces.

Coastal provinces have the largest exposures to household debt, due to more mortgage loans and higher property prices. However, there are greater default risks within credit card loans and consumer credit within less developed inland provinces where debt has risen quickly, and the municipalities of Tianjin and Chongqing. Mortgage loans are a key risk but are likely to be impaired last in sequence, only after a sharper fall in property prices.

Posted May 4, 2020
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