In Depth: China’s Trillion-Yuan Personal Debt Hangover Weighs on Banking System

The urgency with which banks are offloading troubled loans is reshaping China’s distressed debt market

China’s household loans reach 82.84 trillion yuan ($11.4 trillion) at the end of 2024

Every month, as interest payment deadlines approach, the branch manager of a major state-owned bank in eastern China braces himself. He doesn’t wait for clients to show up — he goes to them, often pleading, in his words, “Please, just pay the interest.”

“As long as they cover the interest, the loan doesn’t go bad,” he told Caixin, “That’s all we ask now.”

China’s personal lending market is under mounting pressure. What began as a slow-burning concern in early 2024 has become an acute worry in 2025. Housing mortgages, consumer loans, credit card debt and, most critically, small business loans — collectively known as personal loans — are slipping into delinquency at rates not seen since the 2008 financial crisis.