2026 just started and China already dropped a financial bomb đź’Ł
Beijing quietly EXTENDED a policy letting banks roll over 3.8 TRILLION yuan of bad personal loans. Translation: the debts are so bad they can’t be cleaned up.
Banks are dumping credit-card defaults at 10–20¢ on the dollar, hiding losses, and repackaging the trash into “ABS” that circle back into ordinary people’s savings.
This is robbing the already thin wallet of the average Chinese citizen.
When regulators stop publishing data and just extend deadlines, it means the credit foundation has cracked.
3.8T yuan isn’t the end.
It’s the opening act.
2026 just started and China already dropped a financial bomb đź’Ł
Beijing quietly EXTENDED a policy letting banks roll over 3.8 TRILLION yuan of bad personal loans. Translation: the debts are so bad they can’t be cleaned up.
Banks are dumping credit-card defaults at 10–20¢ on the… pic.twitter.com/hDssulGcrp
— Ken Cao-The China Crash Chronicle (@Ken_LoveTW) January 12, 2026
CHINA’S top financial regulator extended a policy allowing banks and asset management firms to dispose of bad personal loans amid rising credit card defaults, according to sources familiar with the matter.
The National Financial Regulatory Administration (NFRA) last week issued guidance to banks and assets management companies to allow them to transfer and sell soured personal loans and bad single-client corporate loans beyond the original end of 2025 deadline, said the sources, asking not to be identified as the matter is private.
The extension underscores the determination from regulators to provide banks with more flexibility in managing deteriorating asset quality amid economic headwinds. The policy was originally introduced in early 2021.
The NFRA did not immediately reply to a request for comment.