Weird Chinese Saving habits

Chinese saving Habits

Chinese saving Habits


The saving habits of chinese are quite different when compared to the rest of the world. They have a unique style of starting to save only when they reach around 40. It is weird. But it has its own reasons.

A number of things have influenced this savings pattern. Arguments can be made that the current sociocultural norms in China, the ones that dictate that the working population take care of the dependent population, especially the old-aged section, may have a huge impact on the savings model. But savings patterns of an entire country, especially a country as diverse as China, cannot be explained purely through sociocultural reasons. The economic matters behind this decision, especially high cost of housing and living in urban China, have to be explored.

There are three main factors that contribute towards our understanding of this unnatural savings pattern among urban Chinese youth:

  • The one-child policy implemented in China has an economic impact. The parents are preparing for old age conditions and situations always.
  • The burden of providing the older generation with financial assistance falls on the Chinese youth when they are middle-aged, which might have an impact on the amount of money they can successfully save, no matter how high their expected or current income is.
  • New research  shows that the prevalence of inter-generational residences, and the current high costs of real estate in China has an impact on savings trends. The 2002 China Household Income Project data shows that among working males, aged 30, about half still live with parent(s) or in-law(s). This reduces consumption expenditure among the Chinese youth, thereby increasing the levels of savings in youth. Among the middle-aged, land-owning population, the savings rate observes a fall, due to the high cost of real estate.

Asian Economy – The Future is Uncertain

Asia has been the site of growth in the past decade. But in the coming years Asia is going to slow down. China’s economy has grown with sluggish rate past year, and the Future is not so bright.

Lack of demand locally, political instability and terrorism has led to uncertainty in policy making. Major development is the slump of Hong Kong, Indonesia and Singapore.

China which was the driving force in the past decade with double digit growth. However growth of this degree is not going to continue. It is the same old property market crash that is responsible for the slowdown in China.

Slowdown in China Economy

Distress in Chinese Economy

In this bleak scenario, there is a silver lining. The South East Asian economy led by India is going strong. It is not big but signals are of growth. India is experiencing an increase in growth by 15% as compared to last year. The markets are growing with a stable government in India. Exports have shown a double digit growth in all major nations of the region. Many countries like Bangladesh are really picking up. Sri Lanka is showing continued strong growth at 8.2%. India in a major policy shake up has US supporting with export policy relaxation. Infrastructural growth is picking up leading to major investors drawn to the area. So Asia will have a flat growth. But the encouraging factor is that the region as a whole will continue its upswing. The only worrying factor is China. The major worry for China is the Property slowdown which can be taken care of by changing the credit policy. So, fasten you seat belts the bump is coming!!!!!