A new report points to a decline in the assets of China’s middle-class households in the first quarter of 2018 as a result of the faltering performance of the Chinese stock market.
The “2018 Urban Household Asset Index First Quarter Report” (2018年城镇家庭资产指数一季度报告), issued by the China Household Financial Survey and Research Center of the Southwestern University of Finance and Economics, indicates that the reading for the index in the first quarter was 100.2, remaining essentially on par with the preceding quarter.
The report divides Chinese households into five separate wealth categories, however, and found that while the total assets of the “comparatively high” and “high” groups saw an increase, households in all of the remaining groups posted declines.
The middle-asset group saw the biggest decline in its its assets, with its urban household asset change index falling to 95.1 in the first quarter from 96.5 for the final quarter of 2017.
The “low” group and the “comparatively low” group both saw modest declines, while the “comparatively high” group posted a modest increase.
According to Gan Li (甘犁), chair of the China Household Financial Survey and Research Center (中国家庭金融调查与研究中心), stock loses are the primary culprit for the decline in the assets of China’s middle-class households
The report indicates that financial asset change index for urban Chinese households was 95.9 in the first quarter, which is significant of a decline, and that the financial assets of households in all categories saw a shrinkage.
The Shanghai Stock Exchange Composite index fell from 3553 points on 26 January to 3168 points on 30 March, while retail investors have seen overall declines in their returns.
According the report during the period from Q4 2014 to Q1 2018 only 2% of Chinese share investors saw strong returns, 14.3% saw small returns, while 23.7% remained on par.
In sharp contrast 31.1% reported modest losses, while 28.8% saw large losses.