As more and more young people are opting to purchase luxuries such
as decent houses and cars on bank loans, the age-old tradition of
saving for the future is disappearing in China.
A
survey conducted in Nanjing, capital of East China's Jiangsu
Province, and released yesterday shows that 65 percent of the
respondents are in favour of financing their consumption with bank
loans and 18 percent have borrowed money from banks.
Statistics from the Nanjing Branch of the People's Bank of China
show a continual growth in personal bank loans in the first five
months of this year. Private consumption loans issued by the bank
branch totaled 21.981 billion yuan (US$2.66 billion) by the end of
May. Housing loans amounted to nearly 70 percent of the total, up
some 20 percent on a year-on-year basis.
Liu Ning, a 26-year-old who works in a Nanjing-based company with a
monthly family income of 6,000 yuan (US$730), borrowed 80,000 yuan
(US$9,676) and 20,000 yuan (US$2,418 ) from local banks to purchase
an apartment and a car respectively.
"Although I am far from affluent, I still enjoy spending my future
income now," said Liu.
The survey also showed that 60 percent of private bank loans issued
in Nanjing ranged from 10,000 to 20,000 yuan (US$1,209 to US$2,418)
and were mainly used to buy houses, cars and home electrical
appliances as well as to finance education.
Prof. Huang Fanhua with Nanjing University's Business School, said
that China's two-decade long economic development had greatly
changed consumption habits, especially among the younger
generations.
The change helped drive the country's economy, which was still
shackled by insufficient market demand.
Moreover, Huang said the fact that an increasing number of people
seek bank loans to finance major family expenditures epitomized the
consumer's confidence in a better economic future for Chinese
society.
Nevertheless, 11 percent of the 300 sample families, whose members
received higher education and ranged from 26 to 45 years in age,
were against mortgaging their future for short-term enjoyment.
Chinese tradition values saving and frowns on any form of debt.
(China Daily July 4, 2003)