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International Center / Full Report
The per capita saving rate and the debt ratio are one of the important indicators to measure the economic standard of living in the country. China’s current savings rate has fallen to its lowest level in history, from 50% in the past to 45% today. There are even 560 million people without deposits in banks. Furthermore, the debt ratio of Chinese residents has gone from almost zero in the past to almost ten. Over the years, the per capita debt has increased rapidly and the per capita debt is nearly RMB 130,000. It has gone from being a great saver country to a “great indebted country”.
▲ Lu Media reported that China’s savings rate has dropped significantly, with 560 million people without deposits in banks. (Image shows Chinese leader Xi Jinping / profile photo)
Chinese media “Sohu.com” previously reported that China has transitioned from a “big savings country” to a “big debt country” for four main reasons:
First, wages cannot keep up with rising prices. Not only have people reduced their ability to save money, they are also heavily in debt.In the case of rising prices, the income and expenses of many households simply offset. There is no excess money to deposit in the bank, and some purchase goods are paid for in installments. Not surprisingly, the debt ratio is increasing.
Second, since the commercialization of China’s real estate market, house prices have been like a wild horse that has multiplied by ten or even dozens in 20 years.To buy a house, people have to withdraw money from the bank to pay the advance, which results in a reduction in the savings rate. Due to high house prices, more than 95% of people cannot buy a house at one time. They can only buy a house with bank loans for 20 to 30 years. Therefore, since 2015, residents have to borrow from banks to buy houses and their debt ratio has increased considerably.
▲ China’s per capita debt is nearly RMB 130,000 and it has gone from being a big savings country to a “big debt country”. (Image / provided by AP authorization)
Third, many residents buy cars in addition to buying houses.Although it only costs about 100,000 yuan or 200,000 yuan to buy a car, the price is not too high compared to the house price, but a car over 100,000 yuan needs to be repaid in 24 months within 2 years, which is a great opportunity for common families. That said, the pressure is great too. In fact, in addition to buying a car with installment loans, the annual maintenance and maintenance of the car is also a big expense. For the working class, it is naturally difficult to save money.
Fourth, the rising debt ratio in China is also related to the improvement in the consumption prospects of young people.。Statistics show that the per capita debt of the group born after 1990 (after 90) is 127,000 yuan, and must be paid off with 18 months of salary income. At the same time, one in four people born in the 90s who are in debt uses Ant Group’s Huabei microfinance facility, and two out of three people who buy a mobile phone prefer to use installment payments, showing that young people born in the 90s have a better concept of consumption. Serves European and American countries, prefers to enjoy life and pursue quality of life.
