China is a nation of savers. The Chinese government wants its people to spend more and save less. It also wants them to take on more debt, all for the sake of saving the economy from a four-year slump.

The national financial regulator urged banks in March to expand consumer lending and offer more flexible repayment terms. Last month, policymakers promised to provide “innovative” financial services to boost consumption.

Yet many Chinese consumers are wary. An alarming number of them are already defaulting on their debt.

From 2021 to 2024, China’s total household savings grew 50 percent, as people scared off by a big decline in housing values stuffed their money in banks. During the same period, the number of loans that households could not afford to pay back nearly doubled.

For Beijing, expanding access to credit may seem like a quick way to stimulate the economy. But this push for consumers to borrow risks deepening a growing personal debt crisis. Many borrowers, particularly young people, are caught in cycles of debt, driven by poor financial literacy, high youth unemployment and stagnant wages.

Those caught in the cycle run the gamut: factory workers, young professionals and gig economy workers. They are people who barely make ends meet while living in fear of default, calls from debt collectors and an overwhelming sense of shame.