Tap Coogan – July 28th, 2023

While China’s now-shrinking population has officially been overtaken by India, household indebtedness is still climbing. As the following chart from Barclays via The Daily Shot highlights, the ratio between Chinese household debt and disposable income has overtaken the equivalent figure in the US on the eve of the Global Financial Crisis:

China presumably has ‘tools’ to ensure that this doesn’t blow up all at once but regardless, China will have to manage this deleveraging against the backdrop of a rapidly aging and shrinking population, a supply chain exodus, and high youth unemployment.