China’s property frenzy and surging debt raises red flag for economy

Outstanding loans have risen sharply to 40% of GDP but analysts fear the end of the credit binge could trigger a crisis for the wider world

Chinese household debt has risen at an “alarming” pace as property values have soared, analysts have said, raising the risk that a real estate downturn could wreak havoc on the world’s second largest economy.

Loose credit and changing habits have rapidly transformed the country’s famously loan-averse consumers into enthusiastic borrowers.

Related: ‘This is just the start’: China’s passion for foreign property

Related: How Australian households became the most indebted in the world

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