Latest News:  
Beijing   Sunny    35 / 22 ℃  City Forecast

Home>>China Society

Growing family wealth masks quality of economy

By Gao Lei (Global Times)

08:37, July 02, 2012

A recent study conducted by the Southwestern University of Finance and Economics (SUFE) showed that Chinese families' net worth - a family's total assets minus its total liabilities - was already about 21 percent higher than of the of US families' in 2010.

The study, titled China Family Financial Investigation Report 2012, found that Chinese families' net worth in 2010 reached $69.1 trillion, 21 percent higher than the US' $57.1 trillion.

This revelation has surprised both scholars and ordinary people in China, as they don't feel they own that much wealth even though the country has enjoyed rapid growth for decades.

But the data found in the survey could be valid because of China's huge population, which is four times that of the US', and its rising economy. Data released in early June by the US Federal Reserve has noted a nearly 40 percent decline of US families' net worth from 2007 to 2010 mainly due to falling home prices.

However, the number doesn't translate into the quality of the economy. Although experts also agreed that the result of the survey was primarily influenced by China's population and economic factors, the economic motivation was in fact China's skyrocketing house prices.

According to official statistics, house prices in major cities have generally tripled over the last 10 years. In Guangzhou, for instance, the average price has risen from around 4,000 yuan per square meter in 2001 to more than 13,000 yuan in 2011 for newly-built apartments. Soaring housing prices have boosted Chinese families' wealth, at least in their account books.

Lack of regulations in the stock market and a poorly managed social security system have left people with no other choice but to invest in property.

Those are the reasons that rising property prices hardly bring Chinese families a greater sense of security. When the SUFE's report was released, there were far more doubts than there were cheers.

Houses now account for more than 70 percent of Chinese families' total assets, based on a study by Tsinghua University in 2010. However, the figure in the US was only around 40 percent. It could be devastating to Chinese families if the housing bubble bursts.

The result of the survey may look promising. But by itself, it is not enough to understand the whole picture

Email|Print|Comments(Editor:梁军、马茜)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. Flag-raising ceremony held to celebrate HK's 15th return anniversary

  2. China's Jiaolong successfully completes deep sea dive mission

  3. PLA soldiers conduct cultural activities

  4. Re-entry capsule of Shenzhou-9 spacecraft opened

Most Popular

Opinions

  1. Border conflict laid aside as giants draw closer
  2. Take wait-and-see approach to US sanctions
  3. Money not a panacea for small business problems
  4. 'Global effort needed to fight corruption'
  5. New welfare stock accounts' impact limited
  6. Leftover men to be a big problem
  7. A symbol of affluence or a trap of luxury?
  8. Premier's visit sign of close ties with region
  9. Property necessary pill for economy
  10. Chinese banks must go global

What's happening in China

Re-entry capsule of Shenzhou-9 spacecraft opened

  1. Major high-speed railway opens in central China
  2. Shanghai aims to be yuan clearing center
  3. China extends trade goods forex reform
  4. PBOC governor reiterates prudent monetary policy
  5. China codifies punishments for abusing prisoners

China Features

  1. US-Japan-ROK drills aim to fix alliance weakness
  2. Why Chinese listed companies withdraw from US?
  3. Dreams can challenge any depth, height
  4. How can traditional Chinese medicine earn trust?
  5. Eurozone should move forward or it will fall over

PD Online Data

  1. Spring Festival
  2. Chinese ethnic odyssey
  3. Yangge in Shaanxi
  4. Gaoqiao in Northern China
  5. The drum dance in Ansai