Sonia Kapoor, Thought Leadership, Nielsen China
Chinese consumers are notorious savers. They consistently show a high saving rate -- the highest in the Asia Pacific region and substantially higher than developed economies like those of the United States and the United Kingdom. And while economic theory based on forward looking models suggest that countries experiencing strong GDP growth should see a drop in savings rate, China’s savings rate has continued to remain high despite its remarkable GDP growth.
A popular explanation is that China’s legendary savings habit is influenced by the Confucian values of thrift and frugality. But does this theory apply in the present day?
While the notion of not going into debt is a strong traditional sentiment in China and many East Asian countries, Nielsen’s research shows that aversion to debt is slowly changing. As incomes grow and attractive loan schemes and investment opportunities present themselves, Chinese are keen to avail themselves of them, proof that the cultural factors may not be telling the full story.
Nielsen takes a deeper look into the strength of the frugality hypothesis by exploring non-cultural factors that may have a role in explaining China’s high savings rate.
So Why Do Chinese Save So Much?
Nielsen’s research reveals that three key factors play a stronger role in explaining the savings rate than the frugality theory:
Read Nielsen's full report: Saving a Top Priority for Chinese…But Why?