In 2025, “debt crisis” has become an unavoidable heavy topic in mainland China. On social media, people are no longer comparing wealth, but instead, a trend of “who has more debt” black humor is emerging. Posts are filled with phrases like “I can’t afford it anymore,” “salary cuts,” “layoffs,” “can’t afford mortgage payments, surviving has become a challenge,” and more. From government officials to corporate programmers, and even independent freelancers, more and more people are being pushed into the abyss of debt by an invisible force, with each situation worse than the last.
These online “debt confessions” reveal that besides heavy mortgages, various online lending platforms such as Alibaba’s Jie Bei and Huabei have become common sources of debt totaling hundreds of thousands for many. Especially for those long-term unemployed, online loans have almost become their only means of sustaining life. A prevalent sense of foreboding is spreading: a worse situation is on the horizon.
Blogger “Da Sao” is someone who specializes in providing advice and assistance to those in debt. On July 8th, he shared a heart-wrenching plea message in a video: “I have two houses, a loan of 1.2 million, credit card debt of 35 thousand, credit loan of 400 thousand (Alibaba 190 thousand, Du Xiao Man 100 thousand, JD+ Yi Xiang Hua 110 thousand). Currently, mortgage and credit card payments are regular, but I can’t pay back the other online loans; none have gone into arrears yet. Due to checking too many loan apps, the amount has reached the limit, and my credit report now shows me as a big borrower. I don’t know what to do. Should I wait to pay back all the online loans and credit cards when I have the money? Will defaulting on online loans lead to the auction of my house? Is it possible to get another loan? My family can’t help me, and my wife is on the verge of divorcing me if it weren’t for our child. I can’t sell the house now, and even if I do, I need an additional 150 to 200 thousand in loans. Recently, I’ve been desperate due to illness and encountered many scammers. I hope to receive some professional advice.”
A “big spender” in credit reports refers to a person with numerous intensive credit inquiries and multiple loan information indicating frequent recent loan applications, complex credit conditions, or excessive burden, making them high-risk clients for financial institutions, which can make it difficult for them to borrow money in the future.
A blogger born in the 80s recalled hearing about “debt” for the first time while in junior high school. At the time, his mother told him that everything at home (house, shop, business) was built on borrowed money, and they made money through debt financing. “Back then, I thought people who could handle debt were impressive.” However, in recent years, this “debt” made him feel suffocated because their lives still depended on borrowing, yet their parents’ earning capabilities had diminished. “The monthly bills felt like a death knell, suffocating. Like most people, I started feeling that being in debt equates to failure.”
On July 7th, The Economist published an article titled “Why so many Chinese are drowning in debt,” pointing out that before the Chinese economy started to decline, people were accustomed to borrowing significant amounts from large online lending platforms like Alipay, WeBank, etc. The article cited the example of Lily, a millennium-generation individual in Shanghai, who shared her debt experience through short videos on social media accounts and even mentioned people competing over who had more debt, saying, “Oh, I owe 10 million, I owe a billion.”
Lily fell into a debt crisis when the software company she previously worked for stopped paying salaries, leaving her with 30 thousand debts from online lending platforms. Consequently, she turned her “bankruptcy story” into a means to attract traffic and earn money on social platforms.
Regardless of the reasons, many Chinese are currently deeply engulfed in a debt crisis, some even forced to deal with relentless debt collectors.
The Economist’s article noted that debt is increasingly weighing heavily on the middle class in China, stifling their consumption and shaking the foundation that the CCP relies on for governance. The debt issues faced by the CCP government primarily include high local government debt and corporate debt. Additionally, it has to confront challenges posed by household debt.
Household debt as a share of China’s GDP has risen from less than 11% in 2006 to over 60% now. Lenders include state-owned banks and tech platforms.
An independent macroeconomic research institute specializing in studying the Chinese economy, “Longzhou Economic Information,” estimates that currently, around 25 to 34 million people may have defaulted. When including those overdue, the number could range between 61 to 83 million, accounting for 5% to 7% of the total population aged 15 and above.
The institute states that both figures have doubled compared to five years ago. In the backdrop of soaring youth unemployment rates and a sluggish real estate market, the situation may continue to worsen.
The Economist’s article suggests that during China’s economic boom, housing loans were seen as a secure investment. However, the government’s “dynamic clearance” measures in 2020 and subsequent real estate market collapse in 2021 completely altered the landscape.
Bloomberg reported that the crisis in the Chinese real estate market is severely impacting China’s middle class, as approximately 70% of all families, including the middle class, have deeply tied their assets to real estate. A 5% decrease in housing prices could erase 19 trillion RMB in housing wealth.
Regarding the true scale of China’s debt-ridden population, official data remains undisclosed, with significant discrepancies in estimates among different institutions. According to the financial statistics report for the fourth quarter of 2024 released by the People’s Bank of China, by the end of 2024, residents’ bank system loan balance in China was 89.72 trillion RMB, a 7.3% year-on-year increase. However, a report from the bank’s financial research institute estimated the actual total debt of residents to be around 103.5 trillion RMB, 15% higher than the official figure. Even more astounding, a survey from China’s Income Distribution Research Institute at Beijing Normal University indicated that residents’ total debt might reach a staggering 200 trillion RMB, twice the official data.
Financial blogger “Borderline Chinese Saying” recently analyzed that although officials don’t disclose specific debt numbers, by observing the trends of “dishonest debtors” (commonly known as “deadbeats”), one can speculate the true trajectory of the debt-ridden population. This group belongs to a severely indebted segment. By the end of June 2019, China had 14.43 million “deadbeats,” equating to at least one person on the list for every 100 individuals based on China’s official population count.
He believes that even more depressing than the “deadbeats” are the “homeowners facing foreclosure on their mortgages,” primarily comprising of working-class individuals. Unemployment due to worsening economic conditions, making it impossible to repay mortgage loans, has led to properties being auctioned off by the court, resulting in people losing everything they have worked for over decades in an instant. In 2020, the total number of foreclosed properties on Alibaba Auction was about 1.33 million, rising to 1.68 million in 2021.
However, data on foreclosed properties in 2022 is no longer public. “It’s unimaginable how severe the situation must be for the CCP government not to disclose it.” He speculates that the actual number of foreclosed properties in 2022 may range between 3.2 to 3.8 million units, or more conservatively, at least over 5 million units by 2023. The number of foreclosed properties in 2024 remains unknown.
He says, the population in debt is frightening. If someone is not on the list of deadbeats, they are not considered severe debtors. So, how many moderately indebted people are there?
A recent article from blogger “Jihua Ship” has been widely circulated. The article referenced statistical data indicating that over half of the population—around 700 to 800 million out of the official 1.4 billion—are burdened with varying degrees of debt. The sources of this debt are diverse, including mortgages, car loans, credit card debts, consumer loans, and loans between relatives and friends. Particularly in first and second-tier cities, mortgages have a significant impact as a debt source. Research shows that in urban areas, nearly 80% of families feel pressure due to housing loans, while in rural areas, consumer loans and borrowing from relatives and friends are common debt sources.
Even in some relatively stable middle-class households, many shoulder hundreds of thousands or even millions in mortgage debts or other forms of loans. This has given rise to widespread “living from paycheck to paycheck,” with most household or personal income going towards debt repayment. The number of people deeply entangled in such debt across China has become an undeniable social and economic issue.
Political and economic blogger “Xiao Ka Shuo” recently stated that traditionally, Chinese saved and held deposits for security, but now, “the scale of debt has shattered the sense of deposit security.” Mortgages are the biggest source of debt for Chinese. Once individuals are shackled by debt, they realize many decisions are no longer in their hands, leading to constraints on their lives.
“The government uses debt to stimulate consumption, and consumption to drive the economy. But when the economy weakens, and risks rise, this logic will ultimately push more people into the abyss. The government seems to be helping you achieve your dreams on the surface, but in reality, it’s providing short-term pain relief for the economy with an exorbitant long-term cost,” he says.
“Xiao Ka Shuo” warns that every debt is like an invisible rope tightly binding the future of those indebted. This debt is more like a massive “time bomb,” with the potential to “explode” at any moment when income stops or the economic environment deteriorates.