US media: China’s amazing debt consumption after the 90s

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US media: China’s amazing debt consumption after the 90s

2018-12-08 10:25:02 102 ℃

The US "Jing Daily Media" December 7 article, the original question: Can China's heavily indebted young people continue to support the future of luxury goods? The “Chinese Dream” of luxury brands relies heavily on Chinese millennials and Z generations (referring to post-95 and post-00) consumers. Bain estimates that by 2025 they will purchase luxury goods that will account for 46% of the market. But what if this good prospect is partly driven by debt?

A recent survey by HSBC shows that the debt-to-income ratio of China’s post-90s generation has reached an astonishing 1850%, and the group’s debt per capita to various lending institutions and credit card issuers exceeds $17,433. Combined with 120,000 yuan). According to data from a US-listed financial lending platform, about 85% of Chinese applicants for consumer loans were born after 1980: 24% are after 80, 7% are after 85, 37% are after 90, and 12% are after 95, 4 % is after 00.

The Chinese young people decided to embrace the debt life for several reasons. First of all, as a group eager to get instant gratification, it is certainly acceptable to owe debts with high-profile luxury goods in advance.

Yu Runting (sound) who is doing marketing work in Shanghai is one of them. The net income of the 26-year-old is only 9,000 yuan, 95% of which is spent on rent, daily necessities and other expenses. But this year, she bought four luxury items by maximizing the use of four credit card overdrafts and a loan from Huayuan for a total price of $12,800. At present, she only paid off part of the credit card's arrears. The current debt is about $8,400 and the interest is $300 a month. When asked if she was worried about her inability to repay the arrears, she said that she would not worry. "I will beg my parents for paying off for me when I go home during the Spring Festival." Yu is full of confidence.

The optimism of Yu reveals how different China's consumer debt problems are from the West. “Many of these young luxury consumers are the only children who spend money at home,” said Chen May Yee, Asia Pacific Director of JWT Group. “They have never experienced the experience of their parents.” It can be said that Chinese parents are A person who really powers young consumers to buy luxury goods. But Yee cautioned that although this consumption pattern may be sustainable in the short term, it is hard to say in the long run. (Author Yiling Pan, Chen Yi translation)