China’s National Bureau of Statistics recently reported that, by the end of 2016, the total amount of resident’s bank savings had reached 60 trillion yuan (US$9 trillion). However an article in the China Business Journal argued that the number is alarmingly small compared to housing prices and mortgage amounts.
Since China has 1.3 billion people, the average bank savings is 46,000 yuan per person. In Beijing’s the average bank savings is 130,000 yuan, the highest in the nation. However, the average housing price in Beijing is 5 million yuan. How can people afford a house?
The article further compared the total mortgage vs. total bank savings in the major cities. The traditional Chinese thinking is not to get in debt, so the author viewed it as a bad thing for the total of mortgages to be higher than the total of bank savings (it would mean that people collectively cannot afford their houses). Several cities fall into this group. For example, take Shenzhen. The total of all mortgages amounts to 1.4 trillion yuan in Shenzhen, but the total bank savings is only 1 trillion yuan.
Source: China Business Journal, September 18, 2017