Our series moves to China, the world’s most populous nation. It’s a place that drew the eyes of the world during the 2008 Summer Olympics and is experiencing a credit card boom that is almost beyond belief.
Stunning credit card growth
There were 104 million credit cards in circulation in China in March 2008. There were only 3 millionin 2003! However, debit cards ( roughly 1.4 billion in circulation in March 2008) are still much more popular.
What credit crunch?
According to LATimes.com, “Unlike American credit card firms, which are cutting back because of rising delinquencies, Chinese banks are stepping up their marketing of plastic. In the next five to 10 years, analysts say, China could issue 1 billion new cards.”
Inspired by the Olympics
The Chinese government promoted the growth in credit cards with an eye toward making it easier for foreign tourists to spend money during last summer’s Olympics. It resulted in a huge increase in the number of ATMs and of merchants who take plastic. Still, outside of the huge cities, theirs is still largely a cash society.
Cards and crime
A serious crackdown on defaults
According to LATimes.com, “Under Chinese law, a credit card user who intentionally defaults on a sum as little as $3,000 can be sentenced to as much as five years in prison.”
Chip-and-PIN machines compromised
Chinese organized crime syndicates, along with their Pakistani counterparts, are blamed for doctoring hundreds of chip-and-PIN machines across Europe to capture shopper credit card account details and send them overseas.
Partners in crime
Two collaborators in this summer’s massive theft of more than 40 million debit and credit numbers from companies, such as TJMaxx and Barnes & Noble, were reportedly based in China. NYTimes.com says, “The criminals stored much of their data on computer servers in Latvia and Ukraine, and purchased blank debit and credit cards from confederates in China, which they imprinted with some of the stolen numbers for use in cash machines, investigators say.”
Official tourism site
– China National Tourist Office
Location: Eastern Asia, bordering the East China Sea, Korea Bay, Yellow Sea, and South China Sea, between North Korea and Vietnam (map)
Population: 1.3 billion (July 2008)
Internet users: 253 million (2008 est.)
Area: 9,597,000 sq. mi. or 3,704,000 sq. km. (the world’s third-largest by area)
GDP: US$7.099 trillion (2007 estimate)
Key exports: machinery, electrical products, data processing equipment, apparel, textile, steel, mobile phones
Key imports: machinery and equipment, oil and mineral fuels, plastics, LED screens, data processing equipment