{"id":503593,"date":"2026-05-26T15:17:12","date_gmt":"2026-05-26T15:17:12","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/503593\/"},"modified":"2026-05-26T15:17:12","modified_gmt":"2026-05-26T15:17:12","slug":"china-should-learn-household-balance-sheet-lessons-from-us-subprime-crisis-report","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/503593\/","title":{"rendered":"China should learn household balance sheet lessons from US subprime crisis: report"},"content":{"rendered":"

China should draw on American experience to better understand the strains the property downturn<\/a> and falling home prices are placing on households and compile more data on household balance sheets to aid policymaking, according to a new study.The way the United States had tackled recent recessions \u2013 from the bursting of the dotcom bubble in the 2000s to the subprime mortgage crisis<\/a> in 2007-08, and the Covid-19 pandemic just over a decade later \u2013 would be a good reference for China to improve preparedness, help households and defend financial stability, according to a report co-authored by a researcher at the Chinese Academy of Social Sciences (CASS).<\/p>\n

The report, first published in the magazine Financial Minds, was reposted by CASS on Monday.<\/p>\n

\u201cThe evolution of household balance sheets throughout the three American crises can offer experience for China as we explore macro-level balance sheet management,\u201d the report\u2019s co-authors, CASS researcher Li Cheng and Zhang Xiaobo from Southwestern University of Finance and Economics, wrote.<\/p>\n

Comparing the harm from China\u2019s protracted property slump to the way the subprime mortgage crisis crimped American consumption through a \u201chome prices\u2013mortgage loans\u2013credit\u2013consumption\u201d mechanism, the report warned that if China\u2019s depressed home prices were compounded by macroeconomic challenges, households could decide to save even more, at the cost of consumption.<\/p>\n

\u201cThis is out of a desire to guard against deterioration of balance sheets,\u201d they wrote. \u201cThis would, in turn, hurt demand and affect local government fiscal revenue.\u201d<\/p>\n

The report said that since Chinese household leverage increase in the past decade was fuelled by housing loans, changes in home prices and mortgage cost would have an \u201coutsize\u201d impact on spending and financial stability, even though Chinese households\u2019 overall debt exposure was smaller than their US peers.<\/p>\n","protected":false},"excerpt":{"rendered":"China should draw on American experience to better understand the strains the property downturn and falling home prices…\n","protected":false},"author":2,"featured_media":503594,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[174],"tags":[19360,36270,79,381,87479,57287,568,179,18,14215,218789,50996,19,17,218792,218794,218790,182018,218791,107,89616,218793],"class_list":["post-503593","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-american","tag-asset-allocation","tag-business","tag-china","tag-chinese-academy-of-social-sciences","tag-communist-party-central-committee","tag-covid-19-pandemic","tag-economy","tag-eire","tag-financial-stability","tag-household-balance-sheets","tag-households","tag-ie","tag-ireland","tag-macroeconomic-balance-sheet","tag-mortgage-defaults","tag-policymaking","tag-property-downturn","tag-subprime-mortgage-crisis","tag-us","tag-wealth-inequality","tag-zhang-xiaobo"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116641546000152202","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/503593","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=503593"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/503593\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/503594"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=503593"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=503593"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=503593"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}