China’s economy begins to suffer from increasing debt

China’s economy is beginning to suffer from the same problems as the western one – the increase in the debt ratio of the population. In the past, the population was used to saving, which helped turn China into a world power.

Today, however, younger generations of Chinese are beginning to rely more on loans to finance their lifestyle. According to the International Monetary Fund for every dollar of GDP generated in China last year, households owe 54 cents. By 2024, this figure will increase to 68 cents. By comparison, the American consumer’s debt is 78 cents per dollar.

Can cryptocurrencies attract Chinese investors?

Primitive Ventures’ founding partner Dovey Wan, however, pointed out that, with less savings, many in China may already see Bitcoin as too expensive.

“Note that the average annual household income in China is $ 10,000. For those who now find Bitcoin in China, they are 99.9% likely to believe that Bitcoin is already too expensive. ”

she said Twitter.

Wan added that lower-priced altcoins are likely to be more attractive to Chinese investors.

Last weekend, the evolution of tokens such as NEO, Tron, VeChain, Bytom and others of Chinese origin proved to be right. Their prices registered significant increases based on the idea of ​​FOMO.

Chinese banks have needed government assistance

While reducing savings may not be entirely good news for bitcoin, the plight of Chinese banks may be difficult. According to reports, the state-backed Yichuan Bank is the fourth lender that authorities have had to bail out this year.

The rural bank has over one billion yuan in bad loans. Last week, social media circulated speculation that he is on the brink of insolvency. An advertising campaign managed to prevent a so-called “bank run” – mass withdrawal of money by the population.

In recent months, China’s economy has been affected by liquidity problems. As the global economy slows and central banks are forced to rescue the banking system, those with fiat currency savings should pay attention to the situation.

As the visionary Satoshi Nakamoto wrote:

“We have to trust the banks to keep our money and transfer them electronically, but the loans are made in waves of credit bubbles, with only a fraction in reserve.”