How Rich are Chinese Families?

Economic Development

How rich are Chinese families? Chinese families are twice as wealthy as Americans!

The bottom 50 percent of American households in 2019 accounted for only 1 percent of the nation’s total wealth.  The top 10 percent accounted for 76 percent.  And this was before the pandemic accelerated income disparity.  More than 18 million American depend on unemployment benefits, as businesses contract and close.  Nearly 81 million Americans struggle to meet basic household expenses, 22 million lack enough food and 11 million say they can’t make their next house payment.

One thing that the American media is very quiet about; the Chinese people are much more prosperous than Americans.

The Chinese are happy, approve of their government, and are living their life with less worry than we are.

Anyways, lets leave the fairy tale world of American (and UK, Australian and Indian) “news”…

Are Communist Chinese Families wealthier than Capitalist Americans?

China has far better financial and social equality than America–and less household debt.

Debt in China

Why are Chinese families wealthier than American families?

  1. Median Income. Since it lies right in the middle of the wealth distribution, we can think of the median household as “typical. ”Half the families are richer and half the families are poorer than it is. On average, American families are wealthier than Chinese ones. There are a lot of really wealthy American families that pull that average up. But the typical American household remains poorer than its Chinese urban counterpart. 
  2. Home ownership. Chinese urban households are relatively wealthy is that home ownership is quite widespread. 96% of urban households in China own residential property. In the US it’s only 64%. The gap  in home ownership is even bigger at the low end of the income distribution. Only one-third of Americans families in the lowest income quintile own a home. In China, 89% do. Many urban Chinese families own more than one property: 31% have two and 11% own three or more homes. On average, each urban family owns 1.5 residential properties. I estimate that the price-to-income ratio of these households’ residential property holdings at 3.7. (The median home price-to-income ratio in the US, 3.6. In China. it’s 1:3.7.
  3. Financial Assets: Residential property represents 60% of household assets, while financial assets, shops, productive equipment, vehicles, etc., account for 20%. Chinese assets tend to be tangible, physical “brick and mortar” items. American assets tend to be intangible, stocks, bonds, pensions, potential worth.
  4. Low Household Debt77%  of US households have debt (mortgage, loans, student debt), but only 57% of Chinese urban households have debt–and even then, it’ only 16% of household assets–compared to 36% in America.
  5. Higher Savings: Chinese households have higher savings rates than their US counterparts.
Low income Housing in China
Low Income Housing

Here’s a snapshot of home ownership by different income classes. Notice that the highest rate of home ownership in China is among the lowest income earners. In America, it’s the reverse.

China US Home Ownership
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Top 10 richest families in China

Building One San Francisco Every Month


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