We know that the Chinese economy needs to rebalance itself, shifting the emphasis from exports and investments to public and private consumption. The saving rate in China is very high, and Chinese families should be persuaded to spend more. In the West, credit cards were invented years ago for this purpose, part of a "buy now, pay later" culture. It matters little that this culture, especially in America, has led to the crises we all know. But, if used sparingly, credit cards can be useful for stimulating consumption. And in fact these plastic cards have also spread widely in China: a sample survey has established that, among families of the Chinese middle class, as many as three quarters have credit cards.
The problem? They don't use them. Only 9% of owners intend to use them, according to another survey. Economists are perplexed. Why do the Chinese have credit cards and don't use them? Maybe they only keep them for emergencies, maybe it's the Confucian spirit that abhors debt, maybe social safety nets are weak and so families save to protect themselves. If this is true, perhaps it is the state that should first expand public services, so as to reassure families. And fortunately, the state does not need credit cards to spend…
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