China’s economy is not immune to the woes that are creeping into Western ones. It has long been a nation of savers but increasing household debt and more banking bailouts are signaling stormy economic weather ahead. Will bitcoin be the savior when the big crunch comes?
Savings Down, Debt Up
Lifestyle patterns of the West have seeped into China in recent decades. Overstretching to satisfy a growing hunger for materialism will inevitably end in tears. The Chinese have long been shrewd with finances, squirreling away more than their American counterparts. This has largely driven the country to become a global economic powerhouse in recent years.
According to the WSJ household savings in China are declining. The report added that China’s savings rate has fallen in six of the past eight years after peaking in 2010, and further declines have been forecast.
Savings are also being offset with escalating personal and household debt as China’s nouveau riche splash out on new cars and overseas vacations. According to the International Monetary Fund for every dollar of GDP generated in China last year, its households owed 54 cents. By 2024 this figure will rise to 68 cents but this is nothing compared to US consumer debt which is 78 cents on the dollar.
Primitive Crypto founding partner Dovey Wan observed that with fewer savings, many in China may already see bitcoin as being out of reach.
“For whoever is new to Bitcoin in China, 99.9% of the chance he/she will think Bitcoin is already “too expensive””
Please keep in mind that the average annual household income in China is $10k
For whoever is new to Bitcoin in China, 99.9% of the chance he/she will think Bitcoin is already “too expensive”