Chinese consumers are racking up more debt

According to China Economic Review, China’s savers, who sock away cash like almost no one else in the world, are racking up more debt as borrowing options proliferate. Ninety-four percent of consumers used a credit or loan in the past year, up from 85% two years ago. This finding confirms the results of my ongoing research on consumption and saving behavior, following up from the work of Friedman and Modigliani. In China, it appears we are in front of a Life Cycle Hypothesis to the n-power, and debt now goes up even in the private sector.