SCMP

  • Survey by central bank highlights problems the economy was facing before the Covid-19 outbreak
  • More than half of families were in debt, particularly the middle classes and small businesses

China’s urban households were already weighed down by debt before the Covid-19 outbreak, according to a study by the central bank that sounded new alarms about the financial risk the country is facing.

The survey, published by the People’s Bank of China, looked at 30,000 households nationwide last October. It was the first national survey gauging the scale of household debt released to the public by the central bank in recent years.

About 56.5 per cent of the surveyed families reported debts, but the survey said that middle-class wage earners, young mortgage holders and small business owners faced the greatest risks.

The survey results were released on Friday by China Finance, a magazine affiliated to the central bank.

Property contributed to 59.1 per cent of household assets, a higher proportion than in the United States, but also accounted for three quarters of liabilities with the average family having a mortgage of 389,000 yuan.

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