A PBOC research paper is highlighting that a household credit boom could tend to drag down economic growth more so than corporate debt.
- researchers say household leverage slowed real per-capita GDP growth by 3.7% in five years
- due to indebted houlsegholds reducing consumption
- and that highly-indebted households are vulnerable to negative income changes
- recommend that policy makers strictly control the leverage of households
The rapid increase in household debt in China has been driven by mortgages & a relaxation in lending standards.