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2012/11/28

Household Financial Assets

1.       Overall participate rate

We examine the household involvement in the financial markets in the following aspects, including bank deposits, stock market, bond market, fund market, derivative market, and other financial products market. Table1 shows that 5,140 of the 8,438 households in the CHFS sample have at least one bank deposit account.
                                   
Table1  Household Financial Market Participation Rate

Participation: Yes

Participation: No

Number

Percentage (%)

Number

Percentage (%)

Bank deposit

5,140

60.91

3,298

39.09

Stock

745

8.84

7,687

91.16

Bond

65

0.77

8,373

99.23

Fund

358

4.24

8,080

95.76

Derivative

4

0.05

8,434

99.95

Other Financial Products

93

1.10

8,345

98.90

2.       Stock market participate rate

We define households with participation to the stock market as long as they have stock accounts. Table 2 shows that 745 households in the sample own stock account, accounting for 8.84% of the sample. In other words, over 90% of the households do not own any stock. 661 urban households, i.e. 16.56% of them, have stock accounts and 84 rural households, i.e. 1.89% of them, have stock accounts. This suggests that a few rural households have started to participate in the stock market.
                            
Table2  Households Stock Market Participation Rate

Participation: Yes

Participation: No

Number

Percentage (%)

Number

Percentage (%)

Urban

661

16.56

3,330

83.44

Rural

84

1.89

4,357

98.11

Total

745

8.84

7,687

91.16

We asked the 7,677 households that did not own a stock accounts at the time of the interview for their reason(s) for lack of stock ownership. As Table 3 shows, deficiency of knowledge, financial constraint and market risks are the major reasons for households not participating in the stock market.
                                     Table3  Reasons for Households not Holding Stocks

Number

Percentage (%)

 Market is too risky

1,433

18.67%

Return is low

76

0.99 %

Don’t Know How to Open An Account

178

2.32 %

Security Company is Too Far

66

0.86%

Don’t Know Where to Open Accounts

116

1.51%

The Procedure is Too Complex

134

1.75%

Lack Relevant Knowledge

4,034

52.55%

Had loss in stock market

93

1.21%

Never heard of them

796

10.37%

Insufficient Money

3,893

50.71 %

Other reason

377

4.91%

3.      Value of household financial assets

The CHFS project investigates the following financial assets, including demand deposits, time deposits, cash in the stock account, stocks, bonds, funds, derivatives, wealth management products, non-RMB assets, gold, cash, and loans to others, etc. As figure 1 shows, the average value of household financial assets in the sample is approximately 63,800 yuan with a medium of 6,000 yuan.



Figure 1  Households Financial Asset
(Unit: Yuan)

We can see there is a huge disparity between rural and urban households as a whole in the financial assets they own as the median value of the urban is more than 3.5 times of the rural. Meanwhile, the large difference between the means and the median suggest a huge disparity across households.

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