Contrary to what the favorable evolution of the economic and social conditions of Chinese families would suggest, greater well-being is not matched by an adjustment in consumption. In contrast to the theory of permanent income, the behavior of Chinese families continues to be characterized by a high and growing propensity to save. According to OECD data, in 2012 Chinese families saved a share equal to 25,2% of GDP, 7 percentage points more than the minimum peak of 18,2% reached in 1993 and 5 percentage points more than at the beginning of the millennium.
The extensive literature on the subject has identified multiple determinants at the basis of this phenomenon, partly linked to changes in the country's demographic structure and partly to its gradual process of economic development. Family planning introduced at the end of the 30s (with the introduction of the one-child policy) favored greater savings in anticipation of the decrease in the support owed by adult children to their parents (some studies give this factor a weight between 60% and 49% in the decision to increase); in China, moreover, this behaviour, rather than a custom, is a duty envisaged by the constitution (art. XNUMX).
Chinese families also save to finance a better education for their children and allow them to reach jobs capable of ensuring an adequate income also for the maintenance of their parents. Sample surveys conducted in 2005 and 2011 confirm that over-XNUMXs expect around half of their income to come from family support.
Even the imbalance between the sexes generated by the distorted application of the one-child policy seems to have influenced the savings rate, especially in the regions where the phenomenon is more marked: a significant increase in the share of unspent income was in fact achieved starting from 2003, coinciding with the entry into marriageable age of those born at the beginning of the family planning period, especially in families with male children.
Although so far the one-child policy has been the main reason for the increase in the savings rate, new research shows that intergenerational cohabitation, house prices, the expectation of rising medical costs (due to of population ageing), the growth of education costs and the progressive disappearance of services guaranteed in the past by the state system of social protection (iron rice bowl).
Sample surveys to investigate the trend in the propensity to save by age group have revealed that the highest peaks are recorded in the extreme classes: in the younger ones it accumulates to provide for the payment of studies, in the older ones to face the problems of Health. An unusual U-shape of the savings curve derives from this evidence.
The scenario is further complicated by the possession or otherwise of a "residence certificate" (hokou) which in urban areas discriminates between those who are entitled to services such as social security and health care, enrollment in public schools, right to housing, and who doesn't. The registration plan, set up in the past to limit the large migratory flows from rural to urban areas, should be phased out so as to guarantee 100 million migrants the change of their status by 2020.
This transformation, together with the easing of the one-child constraint also in urban areas (which can be overcome if one of the two parents is in turn an only child) and the further improvement expected both for incomes and for social benefits should favor in the near future a gradual reduction in the savings rate. In addition to the implications linked to the effects on the real economy, attention to savings is also linked to the investment decisions of households, currently oriented above all towards deposits.
In 2014, the amount of deposits from Chinese households amounted to 51 trn yuan (over €7 trn), an increase of 8,9% over the previous year. In 2012 (latest data available with this detail) the financial assets of Chinese households increased by 9,7 trn yuan (€1,4 trn), 1,83 trn more than the previous year (+23,3%) ; 60% of the newly accumulated savings was allocated to traditional deposits while shares of 14% each were invested in forms of insurance and managed savings.
For some years now, Chinese investment funds have been among the world's leading assets under management, with assets under management that in several cases exceed $50 billion, a value destined to increase also in light of the growing number of wealthy people. It is estimated that there are about 45 million people belonging to the "upper-middle class" in the country and some forecasts suggest that they could reach 225 million in the coming years. To get an idea of the potential customers on the Chinese market, consider that a monetary fund with online deposits, in 2014, after just nine months from the start of subscriptions, already had 81 million customers.
