China's household wealth grows fastest in Asia

27 Sep 2016

China led Asia last year with the highest growth rate in gross financial assets, at 18.3%. This rate was almost four times as fast as the global average rate of increase. Globally, savers saw growth of 4.9% to EUR155 trillion (US$128.3 trillion) in gross financial assets last year, according to financial services giant Allianz in its "Global Wealth Report 2015".

China last year also saw its average net financial assets surpass the EUR10,000-threshold for the very first time, coming in at EUR11,500.

In 2015, Asia was the region that showed the world's most dynamic development. After deductions for liabilities, the assets held by private households in the region were up by 10.3% year-on-year in net terms.

In Asia, Chinese households had the highest gross financial assets at the end of 2015: with an equivalent of around EUR19.7 trillion, they held a good 46% of total savings. Households in Japan came in second in the region, with EUR13.8 trillion or 32% of gross financial assets. Although China and Japan have since switched places at the top of the table, one aspect has remained unchanged: households in these two economies, which are home to a total of 46% of the total population in the 10 countries in Allianz's analysis of Asia and which generated 71% of the region’s GDP last year, hold a combined total of almost 80% of private gross financial assets in the region.

Households in Singapore are the richest in Asia, beating countries such as Japan and China, but they also have the highest debt per capita in the region. Singapore’s gross financial assets per capita amounted to EUR114,155, followed by Japan in second place with EUR108,660 and Taiwan, ranking third, with EUR99,257. China  was seventh with gross financial assets per capita of EUR14,281.

Factors explaining gap in financial assets among countries
The Global Wealth Report, which studied the asset and debt situation of households in more than 50 countries worldwide, said that the major differences within the region are not only attributable to the economic disparities, but also to the maturity of the financial systems in the countries analysed. The percentage of the population that has access to an account held with a financial institution is one indicator of how developed a financial system is. In Japan, Singapore, South Korea and Taiwan, more than 90% of the population over the age of 15 has a bank account and, as a result, access to financial services. In China, the proportion was 79% in 2014.

The composition of the financial assets of households also varies in line with the maturity of the national financial systems. Asian households had invested an average of 47% of their financial assets in bank deposits. This means that current and savings accounts and term deposits remained the most popular asset class in 2015, ahead of securities with a share of 34% and life insurance and pension funds with a share of 18%; other investments accounted for a mere 1% or so.

One of the reasons why bank deposits remain so dominant in Asia is that Japanese households have developed a more sceptical attitude towards securities investments due to the ongoing bearish cycle on the capital market, opting to put their money into bank deposits instead. On the other hand, the greater shift towards the capital markets has been driven primarily by households in China, which have started to move their financial assets into products – often also offered by banks – promising higher returns in recent years.

India and Indonesia have the highest share of bank deposits in the portfolio of private households, with the figure standing at 71% in Indonesia and 58% in India. In Malaysia, South Korea, Taiwan and Thailand, bank deposits accounted for between 40% and 43% of financial assets. By contrast, these deposits were significantly underweighted in Singapore, where they accounted for 37%.

 

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