According to a recent survey by McKinsey & Company, Chinese nouveau riche with average annual incomes surpassing US$50,000 hold the same optimistic attitudes toward risk investments and bank loans as their wealthy counterparts in Hong Kong and Singapore.
The number of wealthy Chinese has boomed, currently rocketing to 1.5 million people. This amount reflects the amazing growth rate of 15 percent per year.
Data was gathered for a 2007 investigation, covering more than 4,178 volunteers in 16 cities around 15 China's provinces.
Like their peer groups in other Asian developed countries or regions, every affluent Chinese consumer holds about 6.3 financial commodities in the forms of stocks, bonds and/or funds. The figures in Singapore, China's Taiwan and China's Hong Kong respectively are 5.6, 5.4 and 8.3.
Although over 51 percent of the ordinary Chinese mainland population views these financial products as high risk, 31 percent of the wealthy hold optimistic attitudes toward risk investments and bank loans. This is 14 percent higher than the Hong Kong group, who top out at 17 percent. Prosperous people believe financial investment can improve their life.
About 41 percent of well-to-do Chinese are willing to take moderate or even higher investment risks to earn more profits. Meanwhile, 37 percent in Hong Kong and 24 percent in Singapore have the same opinion.
Three quarters of the group in China intend to "get more advice and help" and 53 percent accept "paid financial services."
However, 24 percent of the participants of this survey have had unpleasant experiences during the past two years and 60 percent of them have complained about the low efficiency of Chinese banks.
"Besides the basic bank functions, Chinese consumers expect more individual products and services, such as optional financial products for small-or-middle-sized entrepreneurs," said Director Wang Ying from McKinsey & Company in Shanghai. "There is large room for the investment and banks should seize the opportunity."
About 75 percent interviewees prefer state owned banks. But 41 percent praised the entry of foreign banks into the Chinese market. This year's foreign bank entries have brought the highest profit growth during the past nine years, 34 percent higher than in 2004.
Due to trade security, more than half of the Chinese consumers choose to directly go to the bank, instead of using online or telephone services.
According to the survey, 67 percent of the people are loyal to their first bank account. They prefer to purchase other financial products there.
Besides the "Big Four" state-owned banks (China Industrial and Commercial Bank, China Construction Bank, the Bank of China and China Agricultural Bank), 20 percent incline to choose other commercial banks. In 2001 the figure was a mere 8 percent.
(China.org.cn by Wang Ke September 4, 2007)