At a recent economic forum in Hangzhou, China's former central bank chief Zhou Xiaochuan warned that the loan industry was fueling excessive consumption among China's young people. The same issue was raised by this year's financial stability report from the People's Bank of China.
The 21st Century Business Herald editorialized that one major factor is the high cost of residential real estate, which has forced many families to rely on credit after they spend much of their savings on a down-payment.
Furthermore, many financial institutions tout credit card businesses which can fuel excessive consumption habits.
Excessive consumption can impact the whole economic structure, for instance encouraging young people to choose to work in the service industry rather than the manufacturing industry. The 21st Century Business Herald warned excessive consumption could lead to credit risks.
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