Core Viewpoint - Despite significant declines in housing prices across various cities in China, a wave of mortgage defaults has not materialized, and banks remain stable, indicating unique characteristics of the Chinese housing and banking systems [3][5][19]. Housing Price Decline - Many cities, particularly in lower-tier markets, have experienced housing price reductions exceeding 50%, with specific cities like Langfang and Baoding seeing declines of 69% and 66% respectively [4][5]. - The overall sentiment is that even with substantial price drops, the anticipated mortgage default crisis has not occurred, contrasting with expectations based on international experiences [5][19]. Mortgage Structure and Borrower Behavior - The structure of mortgages in China differs significantly from that in the U.S., with fixed-term loans and strict repayment conditions, making it less likely for borrowers to default [7][9]. - Most borrowers rely on stable income sources to repay loans, and the cultural emphasis on homeownership leads many to continue payments despite financial strain [11][13][16]. - The consequences of default, including damage to credit scores and social stigma, deter many from considering it an option [14][16]. Bank Stability and Risk Management - Chinese banks maintain low non-performing loan ratios, with major banks reporting rates below 1% for personal housing loans, reflecting effective risk management practices [5][19]. - The requirement for substantial down payments (often around 30%) reduces the risk for banks, as even in the event of defaults, losses are minimized [9][21]. - The banking system's conservative approach to lending and the backing of government policies contribute to its resilience [21]. Cultural and Social Factors - The concept of homeownership in China is deeply ingrained, with homes viewed as essential for family stability, education, and social status, leading to a reluctance to default [13][14][16]. - The societal pressure to maintain creditworthiness and the fear of social repercussions from defaulting play significant roles in borrowers' decisions to continue making payments [16][21]. - The phenomenon of "sacrificing personal comfort" to uphold mortgage obligations reflects a broader cultural attitude towards responsibility and family honor [21].

Core Viewpoint - The article highlights the increasing risk of small and medium-sized banks facing bankruptcy, emphasizing that depositors should be aware of the safety of their deposits and the importance of understanding banking regulations and practices [1][3]. Group 1: Reasons for Bank Failures - The primary reasons for the bankruptcy of small and medium-sized banks include poor management leading to prolonged losses, regulatory evasion resulting in non-repayable loans, and the misappropriation of depositor funds by major shareholders [3]. Group 2: Deposit Insurance and Safety Measures - The People's Bank of China introduced the Deposit Insurance Regulation in 2015, ensuring that depositors with amounts up to 500,000 yuan will receive full compensation within seven working days in case of bank failure [3]. - Depositors should verify if their bank has a deposit insurance mark before depositing funds, as approximately 4,000 out of over 4,600 banks in China participate in the deposit insurance scheme [6]. - It is advisable for depositors to limit their deposits in a single bank to no more than 500,000 yuan to mitigate risks associated with bank failures [7][9]. Group 3: Understanding Financial Products - Depositors must distinguish between "deposits" and "wealth management" products, as only deposits up to 500,000 yuan are covered by the deposit insurance, while wealth management products are not eligible for compensation [10]. - Caution is advised regarding high-interest deposit offers from small and medium-sized banks, as these may indicate higher risk investments that could jeopardize deposit safety if loans are not repaid [12].