Chinese financial literacy beats global average: Report

Chinese consumers' financial literacy is above the global average and far ahead in emergency savings, the Sina Institute for Financial Studies reported on Tuesday, citing a report from the People's Bank of China.

According to the report, the financial literacy index of Chinese consumers was 66.81 in 2020, up 2.04 from 2019.

Among consumers with a higher education background, financial literacy is better. Data showed Chinese consumers with graduate degrees or more have the highest level of financial literacy, with an average score of 70.29, while those with primary school degrees or below have an average score of 60.67.

Consumers in the top income bracket are not the group with the highest financial literacy, the report said. The group with monthly incomes of 10,000-20,000 yuan ($1,547-2,094) have the highest financial literacy with an average score of 70.28, while those with monthly incomes of 2,000 yuan or above have the lowest average score, of 61.01.

From the region view, consumers in eastern regions have the highest level of financial literacy, followed by the central, northeastern and western regions.

In China, consumers aged 30 to 40 have the highest financial literacy, scoring an average of 67.56, while those aged 60 and above have the lowest average score with 63.61.

The report pointed out the financial literacy level of the elderly and teenagers in China are relatively low, showing financial education should continue to be strengthened.

In recent years, 77.02 percent of responders have used mobile payments, and 71.32 of them have paid by cash. Moreover, 83.40 percent of respondents reported frequently using mobile payments to pay less than 500 yuan.

The report said the elderly have insufficient capabilities to adapt to financial digitization. Among people aged 18 to 30, 85.77 percent are using mobile payments, while the proportion among groups aged 60 and above is only 42.59 percent.

The elderly is weak in obtaining financial products and service information from internet, with only 25.09 percent of them get these products and information via internet, while they have high acceptability to get the financial products and service information from concrete financial institutes, with 80.94 percent of them prefer to visit the concrete financial institutes, according to the report.

The report showed the Chinese consumer has above-average financial literacy among G20 economies, and 78.41 percent of financial consumers can cope with an emergency expenditure equivalent to three months' income.

Chinese consumers have obvious advantages in interest calculations, daily income and expenditure management, on-time repayment and financial attitude. However, they scored lower on understanding principles of investment diversification, risk-return relationships and purchasing insurance products, according to the report.

Moreover, the report pointed out the country should improve the public's financial literacy, shore up their financial knowledge, pay attention to teenagers on financial education and help students form a good financial attitude and awareness in the stage of compulsory education.