BEIJING (AP) – To understand why people are so cautious with their money five years after the financial crisis, The Associated Press interviewed consumers around the world. Here is a profile of one person:
Name: Wang Yonghui
Home: Shijiazhuang, China
Wang Yonghui is richer, but he doesn’t feel like it.
The value of his apartment in Shijiazhuang has nearly doubled since he bought it in 2006. But living costs have also soared, and he has to pull cash from savings to make ends meet.
“So our net worth goes up,” says Wang, “but our savings goes down.”
Millions of Chinese have had a similarly jarring experience. The value of their homes and other assets has soared over the years, even during the financial crisis when households in other countries lost trillions of dollars of wealth.
In 2009, the Chinese government unleashed a flood of loans from state-owned banks. While most major economies contracted that year, China ended up growing 14 percent. But the government stimulus came with a cost: a surge in inflation in key goods over the next two years. Food prices, for instance, rose more than 9 percent both years, according to FactSet, a data provider.
Wang, married with two children, once owned a restaurant in Shijiazhuang, 200 miles southwest of Beijing, but closed it in the late `90s when it got harder to make a profit. Hoping for less stress and more job security, he took a job at a government-owned hotel. His wife went to work for a state company. They earn less than they might at private companies but have the security of health insurance and pensions.
Wang dabbled in stocks once, but the Chinese market is plagued by frequent downturns, and he lost about about 20,000 yuan ($3,270) in one of them, a fifth of his investment. He says it is “impossible” to make money in Chinese stocks, and he’ll never buy them again.
He would like to add to his savings, but says his and his wife’s monthly income of 8,000 yuan ($1,300) leaves them nothing to put away for the future.
That makes them unusual among Chinese families, who save an average 35 percent of their incomes. They have to in a society with few social services or pensions. Families save so they’ll have money for medical emergencies and to pay for school fees and retirement.
Despite his struggles, though, Wang is optimistic.
“Life is not bad, although I still cannot save money,” he says. “… I can see the better life coming to us.”
AP researcher Fu Ting in Shanghai contributed to this report.
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