S&P Global: China's Household Default Risk To Rise On Pandemic Woes

There are signs that point to rising defaults in mortgages, credit cards and other household debt in China, but most analysts are not anticipating a systemic crisis just yet.

Hang Qian, Partner at Oliver Wyman talked to S&P Global Market Intelligence. He believes the riskiest part of the population is the low-income households in less developed tier 3 and 4 cities and those who are working in the private sector, mainly in small businesses.

Qian also commented on Chinese government’s initiatives to cope with the bank failures, adding “pushing banks to extend credit may be the best short-term solution but it could be a longer-term poison as such policy would disallow banks to apply risk differentiation in their day-to-day business.”

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