Vacations, planes, and high-speed trains are off limits if you're in too much debt in China

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• China is punishing citizens who can't repay their debts by cutting off access to social services.
• So-called deadbeat debtors are blacklisted, facing travel restrictions and government jobs.
• The blacklist is similar to the country's "social credit" system that punishes undesirable behavior.

China wants its citizens to repay their debts — and it is willing to punish those who don't.

That means that delinquent debtors are restricted from accessing some services in the country, like high-speed trains and air travel. Some, according to a Wall Street Journal report, are forbidden from government jobs and denied pricier insurance policies, vacations, and even nice hotels.

Outstanding debtors are placed on a government delinquency blacklist. Informally, these people are referred to as "laolai" — roughly translated, "deadbeat debtors." And the number of names on the list is about 8.3 million, according to the Journal — a jump of nearly 50% since 2019.

It's not just formal restrictions they face; some phone companies in China have gone as far as assigning special ringtones to debtors to warn other people that they are talking to someone on the brink of insolvency.

However, procedures for personal insolvency in China are few and far between. Unlike most other countries, China doesn't allow most people to write off their debts with bankruptcy, per the Journal.

Instead, the Chinese government can take steps like seizing a debtor's income as restitution, leaving them with a small allowance so they can cover living expenses.

That isn't always enough, though, as one man found when he petitioned to raise his monthly income allowance to help pay for a newborn child. Rather than approving the increase to 12,000 yuan, or approximately $1,600, the Journal reported that the court cut his allowance by nearly 40%. 

In China, a country that traditionally values saving, some consider borrowing money to be taboo. That's backed by a 2021 study, which noted that in Chinese society, "many still view bankruptcy as a vehicle for feckless shirkers to escape their debts."

That's left many debtors feeling trapped by the system, which can make it increasingly difficult for them to pay off seemingly insurmountable liabilities.

China's debtor blacklist is technically separate from its "social credit system," but both have similar functions — namely, tracking individual behavior and rewarding or punishing people for it.

The system, which is not yet fully implemented, has penalized citizens for everything from social media posts to jaywalking. The worst offenders may face trouble getting loans and travel restrictions — similar to the experience of blacklisted debtors.

The Chinese economy has slumped after exiting the pandemic. Researchers have warned of a "debt-deflation spiral" that could make the situation for Chinese households even worse.