A debt crisis to the tune of trillions has affected the livelihoods of many Chinese nationals as they scramble to pay their debts. Beijing, on the other hand, is punishing defaulters in questionable ways
No insurance, no vacations: How China is punishing people who can’t repay debts
Household debt in China has surged by 50% in the past five years to around $11 trillion today. Image used for representational purposes/AP
On Tuesday (April 16), China released data showing that its economy had grown far more than expected in the first quarter of 2024. While this is a reason for Beijing to smile, personal debt is a reason to worry.
It’s a growing burden and Chinese authorities realise this. They have stringent measures to crack down on delinquent debtors.
If you have personal debt, you become an outcast of sorts. You are put on a government blacklist, which is ever-growing: The number of people on it has jumped by close to 50 per cent since last 2019 to 8.3 million today, according to a report in The Wall Street Journal (WSJ). This is about one per cent of the country’s working-age adults.
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We take a look at how China is unforgiving towards those with personal debt.
Punishing people with debt
Unlike the United States, China does not permit individuals, even those who have a streak of misfortune, to file for bankruptcy to write off their debts and start afresh. What it does instead is penalise them
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