Families in Shanghai, Beijing lead debt stakes | SCMP

Are the Chinese a nation of thrifty savers while Americans spend the money of tomorrow with a raft of credit cards?

Not so, according to a study by a researcher at the Chinese Academy of Social Sciences, who discovered that the soaring cost of housing has pushed the average family in Shanghai and Beijing deeper in to debt than their counterparts in New York and Washington.

......average family in Shanghai had a debt ratio of 155 per cent and in Beijing, 122 per cent.

Family debt averaged 115 per cent at the end of last year in the United States, the western country with the highest personal debt.

......sober reading for officials in Shanghai and Beijing who boast to foreigners that property prices in their cities cannot come down before the World Expo of 2010 and the Olympics in 2008, a belief widely shared by the public and a media that fuels the real estate frenzy.

......personal debt levels in China and other developing countries should be lower than in rich countries, which provided free education, healthcare and pensions, services which most Chinese have to pay for themselves.

Since 1998, the government has been pushing consumer credit, primarily for housing and cars, as an engine of the economy. It ordered banks to lend to the public.

......the official figures for income were inaccurate because many people earned money that they did not declare.......

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