Qualitative Changes in Wealth Situation of China

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Last updated at: (Beijing Time) Friday, January 17, 2003

Qualitative Changes in Wealth Situation of China

Professor Fan Gang said in a speech that, by the end of 2000, China's gross wealth had reached 38trn yuan, with private wealth constituting the main part among the wealth composition.

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Professor Fan Gang, celebrated economist and author of Chinese Wealth Report, deciphered the wealth situation of China in a speech in Chinese Economy 50 Chang'an Forum on January 13. "Since the reform and opening to the outside world, the Chinese people have acquired a fresh knowledge of wealth to the greatest extent. By the end of 2000, the gross wealth had reached 38trn yuan, with private wealth constituting the main part among the wealth composition." He put up the conclusion, which was drawn from the following researches in two aspects.

Capital Structure

Among the total calculated volume, state-owned or state-holding enterprises account for 31 percent, private enterprises 38 percent. However, amid the capital ownership structure, state-owned assets take up a meager 26 percent, the national residents 57 percent, the collective, investors from Hong Kong, Macau and Taiwan, as well as foreign investors less than 10 percent. The aforesaid data tell a big change in China's capital structure, which was once dominated by the state and collective, that residents-owned capital has become a substantial part in the nation's total, exceeding the state owned and even that of the state and collective putting together. What's more, residents earn 22 percent of capital elements income.

Financial Assets

With cash, deposits and securities the objects of the study, the volume possessed by governments, enterprises and residents increased by 82, 236 and 130 times respectively as against that in 1980, making up a respective 18.6, 31.7 and 49.7 percent of the national financial assets. This clearly shows that residents hold a bigger part of the financial assets, moreover the net assets at that. Results of the study say amid the 20trn yuan total volume of the domestic financial assets, 30-percent urban residents hold around 80 percent of residents financial assets, among which the high-income stratum has 50 percent. That is the basic characteristic of the current idle wealth in China.

What merits attention is that China is a typical labor-intensified country in pressing demand for capital. Its capital effectiveness is only three percent of the United States, while the profit ratio of capital averages 6.4 percent. In a breakdown, the state-owned capital yields an average 4.9 percent, village and township enterprises reap a profit ratio of 18.4 percent and other enterprises 8.9 percent.

By PD Online Staff Zhu lizhen

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