Abstract: The impact of China’s "rice versus wheat agriculture" production pattern on household debt has rarely been mentioned. Using CHIPs data as a research sample and combining it with regression discontinuity analysis, this study reveals the mechanisms and effects of the north-south divide on Chinese households’ financial dilemma, further expanding the research on Chinese household debt behavior. Compared to northern regions, households in the south have larger debt scales and higher debt capacity. While they are "more willing to borrow," they are less likely to fall into financial dilemma. The underlying mechanism lies in the fact that the "rice versus wheat agriculture" pattern has fostered a "higher-in-the-south-and-lower-in-the-north" willingness for entrepreneurship and business activities. Households in the south have significantly lower levels of investment in business activities compared to the north, while there is no significant difference in business income between the two regions. This indicates that the southern region has a favorable entrepreneurial atmosphere and effective business outcomes, which further promotes household entrepreneurship and business activities. Moreover, the strong commercial atmosphere creates conditions for the widespread development of borrowing activities.

Key words: household financial dilemma, the north-south boundary of China, regression discontinuity design