Almost a third of affluent Chinese are looking to borrow, according to a survey released on the 30th Aug by McKinsey, which also found that most affluent Chinese are seeking, but probably not getting, adequate financial advice.
The management consultancy said that 31 per cent of affluent people surveyed in mainland China were now interested in borrowing, a “surprising” jump from 19 per cent in 2004, when it last carried out its Asian personal finance survey.
In terms of investment and financial planning, 53 per cent of affluent Chinese are now willing to pay for financial advice, compared with 40 per cent in 2004 and an Asian average of 31 per cent.
McKinsey defines affluent as people on an annual salary of more than $50,000, a segment that is now estimated to cover as many as 2m Chinese but growing at an annual rate of about 15 per cent. Meanwhile, China’s overall bankable population is about 130m households, equivalent to 70 per cent of the country’s urban population.
Kenny Lam, co-author of the survey, said the leap in borrowing demand among affluent Chinese was particularly surprising because it was at odds with the common perception that Chinese shied away from borrowing, and also contrasted with the almost flat overall demand for borrowing in China, which has climbed to 21 per cent from 19 per cent in 2004.
Mr Lam said: “Don’t write off China as a culture that doesn’t borrow because there is clearly a segment that needs borrowing. Borrowing might generally be seen as a sign of weakness in China, but the affluent are now willing to do it, not just to buy a house but also to make investments and for other things such as education.”