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Interesting RFA article: #China is experiencing rising deposits, high levels of debt & deflation-- all at the same time. What does it mean? 通缩、全民负债和高存款同时出现 中国经济怪现象？ rfa.org/mandarin/yatai…
Liu Yuhui at CASS "Simply put, #China's current situation is that deflation has begun, & the economy has slipped into the recession. 700 mil people are in debt...The debt ratio of the entire household sector has reached a very high level of 137.9% of its disposable income."
PBOC first quarter data show that RMB deposits rose by 15.39 trillion & household deposits rose by 9.9 trillion, accounting for 64% of the new deposits.
The simultaneous appearance of high debt & deposit ratios shows that Chinese society is borrowing heavily & not repaying.
The simultaneous appearance of high debt & deposit ratios shows that Chinese society is borrowing heavily & not repaying.
"#China's simultaneous high deposit & debt ratios are related to the fact that people have been able to borrow money through platforms like #Alipay in recent years without asset review.
"Borrowing to survive, people are incurring new debts to the repay old ones when they can't catch up, which will snowball...Sooner or later, the capital chain will break, and create a financial tsunami more serious than the 2008-09 subprime mortgage crisis in the US."
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