--- title: Nobody Wants to Borrow in China - Yikes description: Because no one is borrowing in China, the country is experiencing deflation. No bueno. image: https://info.c-loans.com/hubfs/AI-Generated%20Media/Images/comicbook%20We%20see%20a%20sixlane%20highway%20%20In%20the%20three%20lanes%20in%20the%20forefront%20cars%20are%20traveling%20from%20left%20to%20right%20%20We%20see%20around%2020%20cars%20%20%20Crashing%20into%20t.png --- [![c-loans-logo-2025](https://info.c-loans.com/hs-fs/hubfs/images/c-loans-logo-2025.png?width=183&height=86&name=c-loans-logo-2025.png)](https://c-loans.com) [Terms of Use](https://www.c-loans.com/terms-of-use) | [Disclaimer](https://www.c-loans.com/disclaimer) | [Blog](https://info.c-loans.com/) # Commercial Loans and Fun Blog ## [Nobody Wants to Borrow in China - Yikes](https://info.c-loans.com/nobody-wants-to-borrow-in-china-yikes) Posted by [George Blackburne](https://info.c-loans.com/author/george-blackburne) on Tue, Nov 18, 2025 - [Tweet](https://twitter.com/share) ![comicbook We have a busy 6lane highway filled with cars headed left to right Crashing into them is a high speed train travel in the wrong direction-1](https://info.c-loans.com/hs-fs/hubfs/AI-Generated%20Media/Images/comicbook%20We%20have%20a%20busy%206lane%20highway%20filled%20with%20cars%20headed%20left%20to%20right%20%20Crashing%20into%20them%20is%20a%20high%20speed%20train%20travel%20in%20the%20wrong%20direction-1.png?width=1536&height=1024&name=comicbook%20We%20have%20a%20busy%206lane%20highway%20filled%20with%20cars%20headed%20left%20to%20right%20%20Crashing%20into%20them%20is%20a%20high%20speed%20train%20travel%20in%20the%20wrong%20direction-1.png) I will explain why you should care.   [![Free Book, "How To Invest in 12% First Trust Deeds"](https://no-cache.hubspot.com/cta/default/37671/23901fd2-646a-4871-be41-d3adcf3c588f.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/23901fd2-646a-4871-be41-d3adcf3c588f)   ![Delivery-1](https://info.c-loans.com/hs-fs/hubfs/Delivery-1.png?width=784&height=900&name=Delivery-1.png)   [![Apply For a Commercial Loan to Blackburne & Sons](https://no-cache.hubspot.com/cta/default/37671/34e9010d-6f3b-4979-93c2-9e705da5a9fc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/34e9010d-6f3b-4979-93c2-9e705da5a9fc)   Xi Jinping desperately wants the Chinese money supply to grow.  He needs private companies to borrow, invest, and spend.  The loan proceeds that are spent - perhaps in payment to the guy that makes rear blinkers for electric cars - end up in the next bank.  The next bank keeps, say, 5% in reserve and lends out the rest - perhaps to the glass maker.  The next borrower pays its own suppliers - perhaps to the trucking company.  And so on, until that first loan creates *twenty* times as much new money.  This is the *multiplier effect*.  This is how new money is created in China, just like in the U.S.   But here is where everything falls apart.  Suppose businesses are terrified of a pending war.  Xi Jinping has already announced that China is attacking Taiwan in the Spring of 2027, when the tides are right.   [![Free Commercial Loan Software](https://no-cache.hubspot.com/cta/default/37671/f8924837-4c27-4eb1-a5d8-c49f9b09d9e8.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/f8924837-4c27-4eb1-a5d8-c49f9b09d9e8)   ![Coleman](https://info.c-loans.com/hs-fs/hubfs/Coleman.png?width=900&height=1088&name=Coleman.png)   [![Free Commercial Loan Placement Kit](https://no-cache.hubspot.com/cta/default/37671/752b4698-f1ce-4837-be5e-e00e0a994532.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/752b4698-f1ce-4837-be5e-e00e0a994532)   Why would a Chinese factory owner want to be deep in debt right before a major war?  Therefore, very few factory owners are borrowing right now.  Everyone is hoarding cash and battening down the hatches. Now the scary stuff. Did you know that the multiplier effect works in reverse?  If a bank takes in a loan payment but can't find a new borrower to borrow the money, twenty times as money is destroyed!  Destroyed.  Puff.  Burned to cinders.   [![Nine-Hour Video Training Course How to Broker Commercial Loans](https://no-cache.hubspot.com/cta/default/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/2fa994cb-f6ac-4671-821f-b4bd48cb5f1f)   ![Split](https://info.c-loans.com/hs-fs/hubfs/Split.png?width=746&height=750&name=Split.png)   [![Become a Direct Lender Approve Your Own Deals](https://no-cache.hubspot.com/cta/default/37671/3340a345-5631-4c56-940b-320f3d14bbda.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/3340a345-5631-4c56-940b-320f3d14bbda)   [![Get Both Video Training Programs For Just $849.](https://no-cache.hubspot.com/cta/default/37671/d0fb44bc-2893-4551-8a92-6a5080c4296e.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/d0fb44bc-2893-4551-8a92-6a5080c4296e)   It has to do with the fact that the first bank to make the payment above suddenly has less deposits on hand.  Remember, our original borrower withdrew money to make the payment.  In order to maintain its proper banking ratios, the paying bank must reduce the size of its loan portfolio.   The easiest way to think of what happens next is that the paying bank must then call an outstanding loan.  (It actually just takes in some payments and doesn't re-loan that incoming dough.)  Some other borrower then has to reduce his bank balance and pay off the called loan.  The third bank suddenly finds its deposit balance lower and calls in some more loans of its own.  And this continues until -   [![Earn 11% to 12% Interest Since 1980](https://no-cache.hubspot.com/cta/default/37671/cd06940e-b965-4ded-8fa2-95adbe90f1e9.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/cd06940e-b965-4ded-8fa2-95adbe90f1e9)   ![Meeting](https://info.c-loans.com/hs-fs/hubfs/Meeting.png?width=756&height=808&name=Meeting.png)   [![Apply For a Commercial Loan to Blackburne & Sons](https://no-cache.hubspot.com/cta/default/37671/f812ad53-89c3-4144-a4df-ad234d211527.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/f812ad53-89c3-4144-a4df-ad234d211527)   If a borrower in China makes a $100 loan payment, and the receiving bank does not immediately lend that $100 back out (perhaps because no company in China wants to borrow), a total of $2,000 - TWENTY TIMES larger - is sucked out the Chinese money supply.  This is the *Reverse Multiplier Effect* - the multiplier effect working in reverse.  The reverse multiplier effect causes massive deflation, and its why interest rates in Switzerland, Germany, and Japan dropped below zero in 2008. Once deflation takes hold, its hard to stop.  Why buy a car or house today when prices will only be lower next year.  Business activity and consumer spending dry up.  Workers get laid off.  Factories close.  More workers get laid off.     [![List of Commercial Lenders 2,500 For Just $79.95](https://no-cache.hubspot.com/cta/default/37671/2a479e02-02c4-41c6-8c33-27575bcd4d1e.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/2a479e02-02c4-41c6-8c33-27575bcd4d1e)   ![Die Hard](https://info.c-loans.com/hs-fs/hubfs/Die%20Hard.png?width=754&height=886&name=Die%20Hard.png)   [![Huge Referral Fees! 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Folks, have you started to notice that no one has any money?  Money is drying up worldwide.  No one has any money.  U.S. banks are in a huge liquidity squeeze.  U.S. banks are borrowing vast sums for the Fed.   [![Fee Agreement and Fee Collection Course. Just $199.](https://no-cache.hubspot.com/cta/default/37671/b8c2bde4-6428-433c-85cd-dfd884ff4a2c.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/b8c2bde4-6428-433c-85cd-dfd884ff4a2c)   ![Bad parking](https://info.c-loans.com/hs-fs/hubfs/Bad%20parking.png?width=910&height=654&name=Bad%20parking.png)   [![How To Market For Commercial Loans  Video Course ](https://no-cache.hubspot.com/cta/default/37671/31b3aab7-d992-4293-81e6-ba38a950a89d.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/31b3aab7-d992-4293-81e6-ba38a950a89d)   No one has any money.  Did I mention that no one has any money?   [![Follow George on X (Twitter) Hit the Follow Button Next](https://no-cache.hubspot.com/cta/default/37671/8ece6f95-5245-4c5e-af9a-b1a255850a22.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/8ece6f95-5245-4c5e-af9a-b1a255850a22)   [![Subscribe to the Commercial Loans and Fun Blog](https://no-cache.hubspot.com/cta/default/37671/a3bd32c3-bff3-4066-9ca8-2ec475fb5bbc.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/a3bd32c3-bff3-4066-9ca8-2ec475fb5bbc)   Topics: [No Loan Demand in China](https://info.c-loans.com/topic/no-loan-demand-in-china) ### George Blackburne III Owner of C-Loans, Inc. ![George Blackburne III C-Loans Owner](https://info.c-loans.com/hs-fs/hubfs/George%20Head%20Shot%20Small%205%20by%207%20copy.jpg?width=158&name=George%20Head%20Shot%20Small%205%20by%207%20copy.jpg) ### Subscribe via E-mail ### Connect with C-Loans ## [![Get the Latest Scoop on C-Loans Inc.](https://no-cache.hubspot.com/cta/default/37671/bacfb58b-143e-40d7-b126-33c182b5b90b.png)](https://cta-redirect.hubspot.com/cta/redirect/37671/bacfb58b-143e-40d7-b126-33c182b5b90b) C-Loans.com® is sponsored by  C-Loans, Inc. — For more information, contact Tom Blackburne 555 University Ave., Suite 150, Sacramento, CA 95825 Telephone: (916) 338-3232 x 317 * Tom Blackburne in Indiana: (574) 210-6686 * Fax: (916) 338-2328 Real Estate Broker -- California Department of Real Estate -- License Number 01330173 Arizona Dept. of Financial Institutions – License Number 0909472 The Florida Mortgage Brokers License Number: 0708758 [Read our many client Success Stories](https://c-loans.com/mortgage-brokers-overview/success-stories/) » © 2025 C-Loans, Inc. 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