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People's Daily Online>>China Business

Families urged to rethink finances

By Chen Jia and Hu Yuanyuan (China Daily)

12:27, December 26, 2011

Because of high inflationary pressure, most Chinese families are expected to try to preserve the existing value of their assets while formulating financial plans for next year.(Photo/China Daily)

BEIJING - Chinese family wealth may grow at a lower pace next year as economic growth slows and risks in global investment markets increase, said analysts.

The structure of family asset portfolios will need to be adjusted according to the government's changing policies to achieve a maximum investment return, they said.

A key objective of families' financial plans next year will be to preserve the existing asset values because inflation is expected to continue to threaten investment income, said Zhang Shuguang, an economist with Unirule Institute of Economics, a nongovernmental think tank in Beijing, speaking on Dec 17 at a forum held by China Guangfa Bank Co Ltd.

"Inflation may be a long-term problem in the country because food prices may surge again and the price of manufacturing resources is likely to grow fast in the coming year," he said.

Zhang suggested families should invest more in physical assets, including precious metals, real estate and antiques to avoid the deleterious effects of currency devaluation.

According to a report that was jointly released earlier this month by the China Center for Financial Research (CCFR) at Tsinghua University and Citi Foundation, people's awareness of managing family finances has been strengthened in line with their increasing annual income.

The average after-tax income for Chinese urban households totaled 89,170 yuan ($13,933) in 2010, compared with 50,997 yuan in 2009. The average value of assets for each family was 715,947 yuan last year, an increase on 406,536 yuan in 2009, the report said.

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Canada at 2011-12-2670.36.49.*
Chinese government bonds should be a very safe investment, much safer than stocks or funds, and help keep the country"s financial position strong. My consumer tips. Friends and relatives can agree not to exchange gifts; much of the time people don"t receive what they want/need anyway. Here, clothes are deeply discounted twice a year for a short period of time [2-4 weeks]. Fall/winter clothes are deeply discounted after Christmas and spring/summer clothes discounted usually in August. You can find good quality and designer clothes at 70% off original price, and 20% off last ticketed price [of 70%]. Learn how each Western store operates, when their sales are, and the cheapest price seen in a year is the real price. Don"t buy attractive, but useless cheap junk, trinkets and baubles, don"t buy on impulse. Women can learn how to buy nice beads and string them for necklaces & earrings, nicer than cheap jewellery peddled by Western retailers. And don"t let those antiques and art go cheaply. What you think is junk may actually be very valuable.

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