Why China is struggling to convince consumers to borrow: ‘I'm not attracted'
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Eric Liu, who works a white-collar job in Shanghai, is no stranger to consumer loans. The 30-year-old is currently paying in instalments for an iPhone 16 Pro, and previously used a similar plan to buy another smartphone for his family.
However, Liu is only willing to borrow if the lender offers interest-free terms. So, when he heard a week ago that Chinese banks were making it easier to take out consumer loans by raising limits and extending repayment periods, he was unmoved.
'I'm not attracted because of the interest burden,' he said. 'I wouldn't take out a loan just to make a large purchase.'
Many Chinese consumers share Liu's cautious attitude towards spending amid the current economic slowdown, which could pose a problem for Beijing as it
tries to stimulate consumption by relaxing consumer finance policies.
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Earlier this month, China's financial regulators announced an easing of its restrictions on consumer loans, raising the maximum loan from 300,000 yuan (US$41,300) to 500,000 yuan and extending repayment periods from five years to seven.
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