A record 8.5 million Chinese borrowers are now blacklisted for not paying their debts, a report says. They're feeling the same financial pressures as Americans.

A record 8.5 million Chinese borrowers - about 1% of the country's working-age adults - are blacklisted by their government for failing to pay their debts, the Financial Times reported on Sunday. The 8.54 million blacklisted borrowers, who are mostly aged between 18 and 59, are barred from buying airplane tickets, making mobile payments using apps like Alipay, working for the government, using toll roads, and engaging in many other activities, the paper reported. The surge in loan defaults speaks to the challenges facing consumers in many countries including the US, and widespread concerns about the global economy. The restrictions placed on the borrowers threaten to weigh on consumer spending in the world's second-largest economy, crimping global growth. While the US economy isn't faltering like China's, it faces the prospect of a wave of loan defaults thanks to high inflation and interest rates. The Fed's response has centered on raising interest rates from nearly zero to over 5% since early 2022, as higher rates encourage saving over spending and make borrowing more costly, which tends to cool demand. As a result, American households face a double-whammy of steeper living costs and larger monthly payments on debts such as their credit cards, car loans, and mortgages.