Fear and face dictate what China does with its money

China saves out of fear, and it spends to show face, and these attitudes — found in the household, in businesses and in government — aren’t changing anytime soon.

The world wants China to spend more and save less, and urges Beijing to allow its currency, the renminbi, to appreciate to increase the nation’s purchasing power. But to understand this culturally sensitive topic, it is worth understanding how Chinese people think about money.

Official statistics show that total savings make up more than 50% of the country’s gross domestic product GDP, significantly higher than the previous world record held by Japan’s 30% total savings. More remarkably, the enthusiasm for saving prevails from the authoritative central government, from cash-rich state-owned enterprises to low-income migrant workers.

Why Because the Chinese lack a sense of security. The nation...

¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222