To help its economy weather the trade war,
China wants its consumers to splash out.
The government has plans to subsidise consumer loans,
and banks have been permitted to raise borrowing limits for creditworthy customers.
But the question of who lends to whom on China's high street is not straightforward.
In the West, retailers extend credit to their customers.
In China it is often the other way round.
It works like this.
When you get a haircut or eat at a restaurant,
the seller encourages you to pay in advance for multiple transactions.
You might pay upfront for ten haircuts, or put 1,000 yuan ($140) on a pre-paid card,
and the business will, in return, give you extra credit to spend.
Western credit culture encourages consumers to "buy now, pay later".
In China, it is "pay now, buy later".
Such schemes are not unique to China, but they are unusually common.
A report last year calculated that over 1.5bn pre-paid cards were issued in 2023, worth almost 740bn yuan.
The firms lock in future sales and obtain money up front for their business
(for a typical issuer, the cards account for over 10% of their revenue).
In a reversal of normal vendor financing, the customer is, in effect, lending to the enterprise.
The bonus the firm adds to the customer's deposit rises with the size of the initial outlay, and can be large.