Chinese Household Balance Sheet: Structural Shift from Property to Financial Assets Amid Ongoing Deleveraging

Research evidence excerpt

Chinese Household Balance Sheet: Structural Shift from Property to Financial Assets Amid Ongoing Deleveraging

Goldman Sachs Asia Economics Analyst

Exhibit 1: From 1997 to 2022, the household sector’s net Exhibit 2: Both household asset and liability growth rates

worth as a percentage of GDP increased twofold moderated over time

Tn RMB Percent Percent Percent

600 450 35 35

Urban housing Household asset and liabilities Annualized growth of total asset, liability, and net worth

Rural housing

Automobile 500 400 30 1992-2002 2002-2012 2012-2022 30 Rural household fixed asset

Currency 350

400 Deposit 25 25

Bond 300

Share

300 Equity Fund 250 20 20

Insurance

200 LiabilityNet worth share of GDP (rhs) 200 15 15

100 10 10

50 5 5

-100 0 0 0

78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22

Total asset Liability Net worth

“Fund” comprises mutual funds, private funds, and wealth management Source: CNBS

products (WMPs) held by the household sector; “Share” is primarily private

portion of net assets of unlisted companies, which are highly concentrated

among a limited group of investors or business owners.

Source: CNBS

CNBS data show that, as of 2022, property dominated household non‑financial assets,

while cash/deposits accounted for around half of financial asset holdings1 (Exhibit 3).

The concentration in a limited set of instruments—primarily residential property and

cash/deposits—reflects a shortage of diversified, high-yield investment channels in

China.

Exhibit 3: Composition of household assets in 2022

AA breakdownbreakdown ofof householdhousehold financialfinancial assetsassets inin 20222022 HouseholdHousehold totaltotal assetsassets A breakdown of household non-financial assets in 2022

Share Shares Rural household fixed assets 8.1% Automobile 8.1% 5.7% 1.0%