A new report from the People’s Bank of China (PBOC) has found that financial literacy amongst Chinese consumers still lags behind international standards despite ongoing efforts to improve consumer awareness.
The “Consumer Financial Literacy Survey and Analysis Report (2021)” (消费者金融素养调查分析报告（2021）) released by PBOC on 3 September said that Chinese consumers still need to “further increase their basic level of financial knowledge.”
The survey collected data from 118,775 people situated in 31 of China’s province-level administrative units, assessing them across the four areas of financial knowledge, financial behaviour, financial technique and financial attitudes.
The Report gave Chinese consumers a score of 66.81 for financial literacy in 2021, for an increase of 2.04 compared to 2019.
In international terms it ranked Chinese consumer at the “upper-middle” level when it comes financial literacy, performing comparatively well in terms of “financial attitude,” yet lagging in the area of “basic financial knowledge.”
While the Report found that consumers in China generally had a sound understanding of the importance of maintaining a good credit record and the relationship between risk and returns when investing, they also had “inadequacies when it comes to understanding compound interest and loans.”
The Report also highlighted the need for “further strengthening of basic knowledge on commercial insurance” and “inadequacies in knowledge of investment and wealth management.”