Sign purchasing power on the up
By Zhang Zhouxiang | China Daily | Updated: 2019-08-27 07:47
ACCORDING TO CHINA'S CENTRAL BANK, the number of domestic credit card holders increased by 20 percent in 2018. China Daily writer Zhang Zhouxiang comments:
The report released by the People's Bank of China says the phenomenon represents "a fall in delayed consumption preference". In other words, fewer Chinese people want to save money.
Why did that happen? On social media, a common comment was, "I would if I had enough money to save". But that is what everybody says, you never hear anybody boasting she/he has more than enough money to spend.
The fact is that average annual income in 2018 grew by 8.7 percent compared with that in 2017, and it has maintained stable growth for at least five years. People are gaining more money to spend, which is in accordance with the positive trend of the economy.
There are several causes, and one of them might be improvement of the social security system. People have long joked that the average Chinese couple save money in order to buy a house, pay for their children's education, cover their medical bills and support themselves when getting old. Actually, all these costs can be covered by better social policies.
For the past several years, the social policies have been reformed and the percentage of social security coverage has been extended to the majority of residents. Realty prices have also been stabilized thanks to the macro-control efforts, while the cost for public education and public medical institutions has been lowered.
There is now less need to save as much money as before for these expenditures and emergencies.
Whatever the reason people are more willing to use credit cards, there is no need to overly worry about it. Indeed, it is a boost for the economy as consumption is an essential driving force.
China is in the midst of an economic transformation, and one key direction is shifting the economy from investment-driven growth to consumption-driven growth. That in turn requires people to spend money. Therefore, it is a good trend for Chinese people to prefer to spend money, instead of hoarding it.
