Liz Carter senior contributor

[INFOGRAPHIC] To Save or Not to Save: Why Are Chinese Holding on to Hard-earned Cash?

This article was produced in collaboration with ChinaFile, a Tea Leaf Nation partner site.

China is known for saving money, and as China has become wealthier, the household savings rate has increased. China’s personal saving rate has risen steadily since the mid-90s, and now exceeds 50%, much higher than Germany’s 10% – considered high among developed countries – and more than ten times the United States’ saving rate (which is falling) of 4.6%.

Experts have cited China’s transition to a market economy, which has meant a drop in individuals’ income security, as one reason Chinese save despite the country’s economic growth. But the high cost of living, even in third-tier cities, also plays a role.

The below infographic, created by SOHU Finance, offers a humorous but revealing take on this serious issue. It breaks down China’s “defensive saving,” showing just how quickly a major life milestone – like marrying or having a child – can drain the average Chinese household’s bank account.

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Liz Carter

Liz Carter is a DC-based China-watcher and the author and translator of a number of Chinese-English textbooks available on amazon.cn. She and her cat Desmond relocated to DC from Beijing, where she studied contemporary Chinese literature at Peking University, after learning that HBO was planning to adapt Game of Thrones for television. She writes at abigenoughforest.com and tweets from @withoutdoing.
  • Soren

    If the saving is 50%, then the people who has the above level of expenses will have a whole lot more saved up, obviously. Just to clarify the difference between the overall average saving (1,3 bil. people) and the above average spending that is used in the example :)

  • Paul

    I think this article confuses “savings”. The statistics refer to “total savings” which are different from “household savings”. The latter includes business and government savings (you know, that massive pile of foreign currency) while the former only refers to how much households save.

    While household savings is also quite high, it is close to other asian countries. Total savings is out of control (vastly higher than any previous country).

  • http://www.postlinearity.com gregorylent

    try saving 5000 on a salary of 500 a month .. rather amazing … cultures learn by experience

    • Ryan

      You need to explain your units, and probably correct your numbers.

  • RHD

    I think it’s important to point out that, at this point, the Chinese don’t “buy” houses. They lease them for 70 years(or less if not in a city). That affects a person’s savings rate. If you buy a house in the US, it’s also an investment — a place to store your money. When you pass away, that wealth goes to your children or family. With the property rights situation in China now, “buying” a house is not a way to store your money. In other words, with every year that goes by, it’s necessary for you to save money to pass money down to the next generation. American’s tend to have a higher borrowing rate, because they know they have this to fall back on. If times are bad, they can always liquidate their assets, and scale back on their lifestyles.

  • doctor Chaza

    All my Chinese friends in Beijing have many credit cards, zero savings. It is expensive to keep up with the Wangs…