China's economic growth rate fell below 10 percent for the first time in four years on Monday. The country’s National Bureau of Statistics said the economy had grown by 9 percent in the third quarter, adding that the global financial crisis was beginning to have a "negative impact" on China. But the country's bank account holders do not seem worried.
Most accountholders have faith in the Bank of China
Mr and Mrs Li are just walking out of a Bank of China branch in Beijing. The newly-wed couple goes to the bank once a month to deposits whatever is left over from the month before. All their savings are with the Bank of China -- about 10,000 euros.
They are not bothered by the current financial crisis: “We’re not at all worried. All our banks are controlled by the state. We trust our government."
“Our banks cannot collapse”
The Lis are not the only ones to be thinking this way. Wu, a pensioner, also sees no reason to panic. He has no intentions of withdrawing his money and putting it under his mattress.
"The Chinese banks have huge reserves of foreign currency,” he says. “Our banks cannot collapse. As our prime minister has already said, the finance crisis will affect us, but not badly. We will continue to develop in a stable manner.”
Bank account holders may not be worried but shareholders have a reason to be down. So far, they are the losers of this global financial crisis. Many of their shares are worthless.
But shareholders only make up a small proportion of China’s population, as do people who have taken out loans and are now completely indebted.
Traditional thinking about money
Beijing finance expert Zhao Xijun says that generally Chinese people are very traditional when it comes to money: “The Chinese don’t like to borrow money to buy consumer goods. This is part of our culture. We’ve thought in this way for thousands of years. We only borrow money in emergency situations.“
“People look down on those who buy consumer goods with borrowed money. Some young people are behaving more and more like Westerners and borrowing money to buy things, but most Chinese only spend what they have.”
This often means that even big purchases -- for cars or even houses -- are paid for on the spot.
It is this traditional way of dealing with money that explains why most observers in China are not worried about the imminent collapse of the banking system, because they are convinced that neither the banks nor the accountholders would do anything reckless.