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Financial Expert Warns of Impending Subprime Mortgage Crisis in China
China is likely to have a financial crisis as its citizens’ savings growth rate turned negative last year for the first time, according to a Chinese financial expert.
According to the statistics from the Central Bank of China, from January to November 2017, citizens’ savings increased by 3.82 trillion yuan ($608 billion). Compared to the increase of 4.54 trillion yuan ($723 billion) during the same period of 2016, savings decreased more than 700 billion yuan ($115 billion)—a 15.86 percent decrease.
Li Yang, former vice president of the state-run Chinese Academy of Social Sciences and chairman of the Beijing-based think tank, National Institution for Finance and Development, made some predictions about the future of China’s economy during the Bo’ao economic forum held on Hainan Island, China this week, an annual summit for leaders in government, business, and academia throughout Asia.
While answering a reporter’s question on April 9, Li said that if the negative growth rate continues, citizens could incur large amounts of debt. Similar conditions—leading to the collapse of a housing bubble—had led to the subprime mortgage crisis in the United States back in the late 2000s, which precipitated the Great Recession.
China is likely to have a financial crisis as its citizens’ savings growth rate turned negative last year for the first time, according to a Chinese financial expert.
According to the statistics from the Central Bank of China, from January to November 2017, citizens’ savings increased by 3.82 trillion yuan ($608 billion). Compared to the increase of 4.54 trillion yuan ($723 billion) during the same period of 2016, savings decreased more than 700 billion yuan ($115 billion)—a 15.86 percent decrease.
Li Yang, former vice president of the state-run Chinese Academy of Social Sciences and chairman of the Beijing-based think tank, National Institution for Finance and Development, made some predictions about the future of China’s economy during the Bo’ao economic forum held on Hainan Island, China this week, an annual summit for leaders in government, business, and academia throughout Asia.
While answering a reporter’s question on April 9, Li said that if the negative growth rate continues, citizens could incur large amounts of debt. Similar conditions—leading to the collapse of a housing bubble—had led to the subprime mortgage crisis in the United States back in the late 2000s, which precipitated the Great Recession.
