BEIJING: Roughly 100 million consumers in China are struggling to repay personal loans as the world’s second-largest economy loses momentum, according to a Bloomberg Businessweek report. The estimate comes from the research firm Gavekal Dragonomics.
Job losses, a collapsing real estate sector and the long-term fallout from the Covid-19 pandemic have weakened household finances across the country, the report said.
Data from the credit platform Rayunion show the market for unpaid consumer debt has expanded dramatically. Banks transferred about 18.6 billion yuan in bad debts in 2021. By the end of 2025, that figure had climbed 20-fold to nearly 454 billion yuan. The debts are largely unsecured, including credit card arrears and personal loans. Mortgages and auto loans are not included.
Debt collectors describe a borrower pool drawn from across society. Ryan Hu, a 23-year-old collector in Wuhan, said he spends the entire day phoning borrowers. Collectors say those on the other end include restaurant owners whose businesses never rebounded after the pandemic, couples who lost jobs in real estate, and young graduates unable to afford rent.
Official banking statistics put China’s mortgage default rate below 3 percent, a level better than that of the United States. Analysts say the headline figure masks reality. Many borrowers stay current by refinancing or relying on relatives for help, and China’s lack of a nationwide personal bankruptcy law keeps the true scale of distress out of view, they said.
Beijing introduced tougher rules on debt collection this year, curbing aggressive tactics but also slowing recovery rates. Authorities have also capped interest rates on online loans, making it harder for borrowers to secure new credit.