China’s rising household debt is shattering dreams of financial freedom, and ‘fears are spreading’
- Salary reductions, lay-offs, lockdowns and regulatory crackdowns are upending the lives of those who were once the envy of China’s middle class
- If coronavirus-induced lockdowns and restrictions drag out for more than two months, some warn that the impact could be ‘unimaginable’
Across China, people such as Eli Mai, a 40-year-old sales manager at a consulting firm in Guangzhou, were long held up as the envy of the middle class – empowering examples of what could be achieved with a decent job.
But that was back when China’s economic growth was the envy of the world.
Today, even as he owns two properties and remains employed, Mai is buried in debt and constantly worries about losing his job in the face of poor economic prospects and mounting pressure from both domestic and international sources.
His salary has been slashed in half due to lost commissions, and he is pulling in about 10,000 yuan (US$1,570) a month. Meanwhile, his family’s total debt has ballooned to a whopping 3.5 million yuan.
“My hair has turned quite white in the past six months, and I am afraid day and night that I will not be able to make the [monthly loan] payments,” he said, adding that these have surpassed 25,000 yuan – more than the current combined income of Mai and his wife, a teacher.