A credit crunch (信用紧缩 xìn yòng jǐn suō) refers to an economic condition when there is a sudden reduction in the general availability of credit from banks and other financial institutions. Individuals and companies will find it more difficult to get loans. It is usually caused by adverse economic conditions or political problems.
Part 1: Breakdown of Words
- “Credit” (信用 xìn yòng) as in “credit system” (信用制度 xìn yòng zhì dù) or credit risk (信用风险 xìn yòng fēng xiǎn).
- “Crunch” (紧缩 jǐn suō) here refers to a shortage of capital and money.