Why so many Chinese are drowning in debt

The rise of a property-owning, entrepreneurial middle class in China has transformed its cities this century. It has helped to drive consumption in the world’s second-largest economy. In May, retail sales grew 6.4 per cent year on year – the fastest pace since December 2023 – helped by state subsidies aimed at reviving consumers’ enthusiasm. The government has even cautiously promoted borrowing in past years.

But all this has created new risks. Along with car-jammed streets, glitzy restaurants and vast malls has come a massive, invisible change, no less far-reaching: soaring household debt.