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Thrifty Chinese turn into big spenders

Survey finds more are splashing out on luxury items

Ap
Monday 29 January 2001 20:00 EST
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Urban Chinese are shedding traditional saving habits and spending more than ever on big purchases like cars, houses and stocks, according to a survey released today in the government-run China Daily newspaper.

Urban Chinese are shedding traditional saving habits and spending more than ever on big purchases like cars, houses and stocks, according to a survey released today in the government-run China Daily newspaper.

Chinese have been among the most ardent savers in the world, setting aside more than a quarter of their income by some estimates to make up for inadequate pension benefits and health insurance.

But the survey taken last year of 10,000 residents in 22 cities showed more than half replying they bought expensive consumer items like cars or houses, splurged on vacation travel or made non-traditional investments in stocks and insurance, the China Daily said.

About 55 percent reported making such purchases last year, while 21 percent said they put their money in the bank, the newspaper said, summarizing the findings by the China Mainland Marketing Research Company, a private affiliate of the government statistics bureau.

The China Daily reported that the percentage of respondents saying they made big purchases was higher than in 1999, although no comparative figures were provided.

The tradition of "depositing money in banks has given way to the purchase of cars, houses, services and investments," the newspaper quoted a company official, Zhou Jiang, as saying.

Telephone queries to the company for more information went unanswered, the last day of the lunar new year holiday. The report did not give a margin or error or say when and how the poll was conducted.

The reported results appear to show that government efforts to get Chinese to spend more and bolster economic growth appear to be gaining ground. Over the past two years, China has taxed savings and given urban Chinese extra vacation days to encourage spending.

Two decades of market reforms have showered most their benefits on China's cities, where average annual incomes have risen to about dlrs 700, almost three times as high as rural incomes.

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