Comments on: Why do Chinese save?

By: CDC

CDC — Mon, 21 Dec 2009 19:09:45 +0000

I think you are taking the wrong approach. Look at why North Americans (in general) save so little and are so immersed in a culture of consumerism and spending (and then they carry a debt that not even their grandchildren can pay).

By: Phil

Phil — Mon, 14 Dec 2009 17:10:23 +0000

You might consider compulsory saving for homes. In 1998 China introduced Housing Provident Funds to encourage saving for purchasing homes. Employees contribute 5% of their wages and employers contribute a matching amount. The money can be withdrawn only for the purchase of a home which can then be financed at reduced rates. Participation is required for all
employees of government and state-owned enterprises. It is voluntary in the private sector. In 2004, 80 million workers were enrolled with $76 billion saved. This vehicle is essential for the middle class to accumulate the 20% down payment required for purchasing a home.

By: Xuan

Xuan — Sun, 08 Nov 2009 04:57:09 +0000

From my experiences. Asians in general save more as a safety net in case of crisis where they may lose their jobs or be seriously injured. Regardless of where they live. It is a value that Asian parents drill into their children. To always be prepared for the worse, and to not indulge in such things as impulse spending and think in terms of long term benefits rather then short term happiness.
Not to mention use of credit cards is looked down upon by many Asians who believe it is better to save and buy anything wanted or needed with cash rather then impulse spend and use money that the family does not have thus possibly putting the family into debt which many prefer to avoid.
There however is a negative trend. Many people of the younger generation are starting to fallow western trends of impulse spending and instant gratification as will as the use of credit cards. Which is a big correlation. The higher use of credit cards usually mean lower saving rates for individuals. Hopefully this trend will stop.

By: Confessions of a Guilty Hedonist « Eternal Dreamer

Confessions of a Guilty Hedonist « Eternal Dreamer — Sat, 29 Aug 2009 22:41:34 +0000

[...] Reading that article makes me glad that Chinese people are disciplined enough to have such high savings rates. [...]

By: Ron Rothammer

Ron Rothammer — Tue, 23 Jun 2009 00:34:07 +0000

As a Brit with a wife who is Chinese I have also had this discussion with members of her family and friends, who all live in Beijing and Shanghai. They represent the urban section of Chinese society and range from lower than average incomes to “new rich” status.

They all, without exception, save a surprisingly large proportion of their incomes. When asked about this the answer is always the same, there is no social safety net in China and one just doesn’t know what might happen. In other words it is a response to a basic survival insecurity.

My own feeling is that the reasons put forward by another contributor here (Guy de Jonquieres) probably has a huge influence on the whole savings mentality and that is that within living memory there was a complete social collapse and that has left a significant mark on the Chinese psyche.

Ron Rothammer

By: stoneweapon

stoneweapon — Sun, 07 Jun 2009 19:50:26 +0000

Chris,

What is your opinion on this article?

http://www.telegraph.co.uk/news/worldnews/asia/china/3234686/China-more-communist-than-20-years-ago.html

Something never discussed here is the speculative value of the renminbi.

Given the fact that the US is putting pressure on China to change its currency policy and let market forces determine the value its currency, could this be a valid reason for the high savings rate, especially for corporate and government sectors who are well informed.

For example, take notice of the H-share premium to A-shares, just liquidity?

By: Chris

Chris — Fri, 05 Jun 2009 18:27:37 +0000

I’m not an economist, but a plain businessperson employing over 30 quite well paid Chinese staff (all over RMB10k per month) who are mostly in their 20s and 30s. In our offices we often discuss personal finances. To be frank I see no great signs of significant personal savings among this group, especially cash bank deposits. Many hold mortgages, quite a few received large downpayments from their parents, and most have the usual spend, spend attitude of most young people in the West at this age. The only real difference I can identify is that few have any non-mortgage debt (cars, personal loans, credit cards). Perhaps bank deposit savings are mostly held by an older age group or rural households or people much richer.

By: Random Links LII « Random Musings of a Deranged Mind

Random Links LII « Random Musings of a Deranged Mind — Thu, 04 Jun 2009 02:14:50 +0000

[...] Whence Chinese Savings: various possible causes, including health care costs. [...]

By: PT

PT — Wed, 03 Jun 2009 14:07:18 +0000

Not to mention, as most financial historians know, a financial crisis on the moon would probably resemble financial crises on the earth anyway since they all have the same characteristics. Pettis has one of the best financial crises models out there, although I bet he would say its just Minsky’s model appropriated by him.

By: JohnZ

JohnZ — Wed, 03 Jun 2009 14:03:49 +0000

Porfiro, your comment seems pretty bitter and way off the mark. Have you actually read the piece? It seems pretty China-specific to me.