China just tried to sell its household debt crisis for a penny on the dollar. Even that is breaking down.
By end-2025, Gavekal estimated as many as 100 million people, about 1 in 10 adults, were behind on at least 2.2 trillion yuan ($327bn USD) in personal debt. Into H1 2026, the stress was still rising. ICBC’s credit-card NPL ratio jumped to 5.37% from 4.61%.
China has no nationwide personal bankruptcy system. Most of this debt cannot be legally wiped.
Banks have been dumping unsecured cards and consumer loans on a regulator-approved platform: 1,000+ packages in the first eight months of 2026, covering 275bn+ yuan unpaid. Common price: 5 to 7 cents on the dollar. Some deals: 1 cent.
Collection is the bottleneck now. Police have tightened scrutiny of collectors over social-stability concerns. Firms are cutting staff or shutting. One Shanghai operator laid off nearly 500 people in a month. Many borrowers are 20 to 35 and cannot pay.
Unlike the last corporate NPL boom, this paper is mostly unsecured. No apartments underneath it. Buying cheap is easy. Getting paid, and getting out, is not.
The question is no longer how low banks can sell. It is whether anyone can collect.
$QNT $AVAX $BOME
By end-2025, Gavekal estimated as many as 100 million people, about 1 in 10 adults, were behind on at least 2.2 trillion yuan ($327bn USD) in personal debt. Into H1 2026, the stress was still rising. ICBC’s credit-card NPL ratio jumped to 5.37% from 4.61%.
China has no nationwide personal bankruptcy system. Most of this debt cannot be legally wiped.
Banks have been dumping unsecured cards and consumer loans on a regulator-approved platform: 1,000+ packages in the first eight months of 2026, covering 275bn+ yuan unpaid. Common price: 5 to 7 cents on the dollar. Some deals: 1 cent.
Collection is the bottleneck now. Police have tightened scrutiny of collectors over social-stability concerns. Firms are cutting staff or shutting. One Shanghai operator laid off nearly 500 people in a month. Many borrowers are 20 to 35 and cannot pay.
Unlike the last corporate NPL boom, this paper is mostly unsecured. No apartments underneath it. Buying cheap is easy. Getting paid, and getting out, is not.
The question is no longer how low banks can sell. It is whether anyone can collect.
$QNT $AVAX $BOME
