A measured recovery
The People's Bank of China's Q4 2025 aggregate household credit data, published last week, shows a 7.1% YoY growth in outstanding household debt, the second-fastest pace since 2018. The composition is more interesting than the headline.
Where the growth came from
- Short-term consumer loans: +18.4% YoY
- Auto loans: +12.3% YoY
- Mortgages: +1.8% YoY (still the smallest contribution since 2002)
- Credit-card balances: +14.6% YoY
The mix continues to rotate away from mortgage debt and toward short-tenure consumer credit, mirroring the structural pivot first observed in 2024.
The household debt service ratio
PBOC puts the household debt service ratio at 14.2%, comfortably below the 2019 peak of 17.6% and the 2014 trough of 12.8%. The household leverage ratio (debt / disposable income) is 142%, up from 138% a year earlier.
What it means for the consumer cycle
- Retail sales (March 2026): +5.4% YoY (NBS)
- Auto sales (March 2026): +8.2% YoY (CAAM)
- Catering revenue (March 2026): +7.1% YoY (NBS)
The consumer credit cycle is the most underappreciated macro variable of 2026. — CICC, macro research
Watch list
- April 2026 aggregate financing data (due May 15)
- PBOC's Q1 2026 monetary policy report (expected May 10)
- Q1 2026 listed bank earnings (begins late April)
