The Chinese real estate bubble is in full swing, but the country’s citizens maintain a reputation for being thrifty and not taking on much debt.
All that is about to change. Big time.
In fact, it already is.
A source in China confirms that in just the last few months, several of his colleagues — as many as 30% of the employees at a medium sized IT services firm — who never once had a credit card have started using them.
Not just that, they’re rolling over debt equivalent to 25% of their monthly salary.
Remember, these are people with almost no experience with debt.
This is not surprising. As the middle class emerges, and people have stable jobs, credit cards offer a quick shortcut to a nice jump in standard of living. Beyond that, other dynamics, such as the gender imbalance, will compell men to spend more for mating and competition purposes.
Bottom line: this market is about to get huge.
Research firm Celent has put together a series of charts showing just how big it will get.
Get ready for the explosion >
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See Also:
- China’s Credit Tightening Pipedream Bursts As Yuan Loans Are Set To Jump 18% In 2010
- China Can’t Tighten Credit Until The Rest Of The World Does
- China Charges Higher Despite Threat Of Credit Crackdown