While the new type of coronavirus, with its headquarters in China, has affected more than 600 thousand people around the world, life in China has slowly begun to return to normal. While thousands of new Kovid-19 diagnoses were made every day in many countries, only 31 cases were detected yesterday in China, 30 of which were people from abroad.
The Chinese Coronavirus is still not fully under control. That’s why some regions in the country are still under quarantine. However, the government started to remove some restrictions and some citizens started to return to their normal lives.
So what kind of picture do people encounter when they return to their normal lives? Many people face the same thing: Credit card debt.
We have already started to feel the economic effects of the coronavirus pandemic. We can see this both in the stock market, in gold and oil, and in market shopping.
The situation in China was not much different from the past three months. The coronavirus affected the Chinese economy and, consequently, the lives of many. It is thought that 8 million people were unemployed only in February. There are also people who could not earn as much money as before, even if they did not lose their job in this process.
These people have borrowed large sums of money from banks in order to survive in the past few months. According to the report of South China Morning Post, the total amount of outstanding loan debt increased by 50% in February 2019 compared to the number in February 2019.
There is a serious increase in the number of people looking for banks to get credit across the country. However, people have difficulty in paying these loans. For example, Yin Weijun, 27, who normally cooks at a hotel but has lost his job because of the coronavirus, summarizes his current situation as follows:
“I had never disrupted any payment in my life. But I was helpless because of the virus. If the bank gives me an extra 1-2 months, I can’t pay my debt again. ”
This situation has reached such a serious level that even a giant bank such as China Merchants Bank has stopped giving people new credit cards because of their unpaid credit debts.
Life in China is returning to normal, but people had to take out loans because they lost their jobs, and now they have difficulty paying these debts. Nor is there any guarantee that banks or government will provide people with convenience. So why does this situation in China concern other countries or even us?
Example to the World
Because China actually represents an example to other countries in this regard. Currently, including the new Turkey began to struggle with the new coronavirus pandemic in many countries. China is approaching the end of this struggle process (it seems). After we start controlling the virus, we can face a picture similar to that in China.
This is how Peterson Chorzempa, a researcher at Peterson International Institute of Economics, commented on the subject. According to Chorzempa:
“The problems currently in China are just a trailer of what’s going to happen in the rest of the world.”
According to the report released by the International Finance Institute in January 2020, household debt in countries such as France, Switzerland, New Zealand and Nigeria has started to rise to higher levels than ever. Besides, loan demand in Australia started to increase rapidly. In a similar table it is laid to occur in Turkey.
People are attracting credit in order to survive during the virus, but it is not easy to pay these debts when the virus is under control (as in the case of China). Before people can pay these debts, they have to find a new job and establish a new order. We will see what kind of convenience will be provided to citizens / businesses about the payment of these debts, or rather, a convenience.