1 Chart Shows How Chinese Consumers Are Still Saving Like Crazy
Jeffrey Towson 陶迅
Consultant and keynote speaker on how to win big as a digital business. Anti-CBDC, free speech absolutist. TechMoat Consulting. Tech Strategy Podcast.
Below is a chart based on Credit Suisse data (re-created and adapted). It compares Chinese consumer spending to other emerging market consumer spending (India, Brazil, etc.). The big difference that jumps out is the savings rate in China.
The high rate of Chinese savings is understandable.
- It’s cultural.
- They are precautionary savings. No social safety net means if you get sick it’s all on you. So people tend to save.
- Chinese savings are not so unique. Japan, Taiwan and Korea all hit a 30%-plus savings rate in their early development.
- If there isn’t much of a consumer finance system available, it’s challenging to leverage yourself up to truly spectacular consumption levels – like buying vacation homes or cars that cost as much as your annual income.
However, that said it is interesting that it is so much above the emerging market average. Why do you think it is so much higher in China?
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Thanks for reading. My writing (and speaking) are on how rising Chinese consumers and companies are disrupting global markets. (#ConsumerChina). I also focus on:
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Some previous posts include:
- Uber China's 5 Big Lessons for Netflix
- My Favorite Map for Understanding China
- The Big Problem with China's 190M Seniors, in 1 Chart
- Three Ways Young Chinese Consumers Are Different
- 4 China Businesses to Avoid
About: I am a Professor of Investment at Peking University Guanghua School of Management in Beijing. I am also an investor, consultant and former executive / slave to Prince Alwaleed.
top photo by China Supertrends (Creative Commons license, link)
Technical Writer @Concept Solutions, LLC | ISO Auditor
9 年Peter Fuhrman makes an excellent point. The conventional wisdom was that those on the Mainland invest in real estate as much, if not, more than use savings.
中国首创创始人兼董事长
9 年Here's the thing, Jeff, for getting onto 30 years I've read innumerable times about this Chinese mania for savings. We're told it exists uniformly in Taiwan, SG, HK, PRC and even often among ethnic Chinese diaspora. So, who would dare question such deeply-embedded conventional wisdom? Well, maybe me. You also live here. You see this is as far from an abstemious miserly culture as one can get. This is not Japan. People spend here like crazy -- on cars, on food, on apartments, on holidays, on luxury goods of all kinds, on gifts including red envelopes etc. I just can't make the numbers work. Yes, official data shows high savings driven by, as you suggest, "no safety net". But, down here on ground level, what one sees is overall a very dynamic almost frantic consumer culture getting more so by the day. In short, I don't doubt Chinese are savers. But, I do doubt the official numbers.