An Eastern Perspective: How Do The Chinese Save Money

In this article, I’ll reveal the secrets of how the Chinese save money.

Since my wife and sister-in-law are Thai and have Chinese heritage, I’ve gotten a lot of money-saving tips from them. Both are savvy with money and sister-in-law studied and works as a financial accountant.

The most fascinating fact about China is that the gross savings rate is 45.9% as of December 2021.

That means for every hundred dollars they take home, they’ll save roughly 46 dollars.

Contrast that to the United Kingdom, where we focus on consumption rather than saving.

Savings rates are typically around 8.7 percent, according to recent data.

That is a factor of 5 we’re talking about.

So, what’s the reason for this substantial disparity?

Why are the Chinese So Good at Saving Money?

First, it’s a cultural thing as we Brits are always hit with an array of sales, financing options, and easy lending.

We’re constantly bombarded with these messages and always pressured to keep up with the Joneses. Much of this originated post-World War II. It was not long after the Great Depression in America and consumption was considered patriotic at that time because they tried to spur the economy on. And what happens in the US usually crosses the pond to the UK. China is very different.

They emphasise is on saving money and what money means to them. As well as the country’s demographics, you’ll also find a heavy aversion to financing things in China. There is a tendency for Chinese people to buy things in cash instead of trying to finance it and taking on debt.

However, right now I’m about to cover why the Chinese save money. I think it’s really interesting and if you understand intrinsically why Chinese people want to save money, it can help you save money as well.

Why do the Chinese Save Money?

Chinese people save money for money’s meaning and what it means to them. As kids, they’re taught saving money is honourable.

Kids often get money in these red envelopes for Chinese New Year and birthdays, and their parents often encourage them to save it. This money is called ‘lucky money’. Money is so significant to the Chinese that they even have a phrase during New Years instead of ‘Happy New Year’. Instead, they say ‘Gong Xi Fa Cai’.

It translates as, “hope you get rich.” That’s not “happy New Year”.

That’s funny because it’s also true. You can also see the importance of money in the way Chinese society treat each other. People with a lot of money are seen as successful. In many people’s eyes it’s often viewed as a positive thing to have a lot of money now. Success also has its other perks in China, and that brings us to my next point, demographics.

Up until 2016 China had a one-child policy implemented in the late 70s and early 80s to stem overpopulation. That meant each family could only have one child. So, if you had more than one child, you would be fined. And in addition, if you didn’t pay that fine, your household couldn’t register your second child’s name in the household system. So, your second child would not be eligible for health care services and other services like education.

Naturally, this policy resulted in a sharp decline in newborns and sex-selective abortions in China. It’s usually more important to have a boy than a girl. This is because the boy usually inherits the family name, as well as the property. So, what you had was a lot of people who were using contraception in a way that they would avoid female births and try to optimise for male births. This policy skews the population towards more males than females over time. At worst, it was 122 males for every 100 females that were born. In general terms, if you have more men than women then you basically have a supply and demand issue. There are more men chasing the same number of women. To stand out as a man in China, you must be successful, and have a lot of money.

The other thing about the one-child policy was that since families only had one child, they weren’t having multiple kids in most cases. That means parents could save more money because they didn’t have multiple kids to feed and clothe.

You had a double whammy with the one-child policy. You had parents not spending as much money. And then the males tried to save as much money as possible to become desirable.

Another reason for saving more money in China is that Chinese people cannot contribute to retirement accounts. They don’t really have a pension system. Besides, many people in China are wary that the pension system that exists may still not be around when they retire. They also worry about healthcare, education and pensions.

These are some of the intrinsic reasons why the Chinese save money. But let’s talk about the money secret in this article, the main secret of why Chinese people save money well. It’s not crazy. It’s just that they have every dollar accounted for. They know where their money goes. And there is a special budgeting system that can help you with this. In the West it’s called the Zero-Based Budgeting System.

The Zero-Based Budgeting System

With this budgeting method you spend every penny of your monthly income so that your amount left at the end of every month is equal to zero. Savings, investments, debt repayments, etc., are also included.

Let’s pretend you make three thousand pounds per month. A zero-based budget might look like this: rent, groceries, necessities all listed.

Then you also have a section for the things that you’re saving for: your emergency fund, your pension, your student loan payments, your holiday fund, and any other savings that you might want to make.

Category	Budget	Actual	Difference
Income	£3000	£3000	£0
Fixed Expenses
Rent	£800	£800	£0
Utilities	£100	£100	£0
Internet and Cable	£50	£50	£0
Car Payment	£250	£250	£0
Insurance	£100	£100	£0
Phone	£50	£50	£0
Gym membership	£50	£0	£50
Total Fixed Expenses	£1400	£1350	£50
Variable Expenses
Groceries	£300	£300	£0
Dining out	£100	£120	(£20)
Entertainment	£100	£80	£20
Shopping	£150	£200	(£50)
Transportation	£100	£80	£20
Total Variable Expenses	£750	£780	(£30)
Miscellaneous Expenses
Gifts	£50	£50	£0
Travel	£100	£50	£50
Charity	£50	£50	£0
Total Miscellaneous Expenses	£200	£150	£50
Total Expenses	£2350	£2280	£70
Leftover	£650	£650	£0

You can see that by the time you reach the end of your monthly budget, you have zero pounds. This is essentially a zero-based budgeting system where all pounds and pennies are accounted for. You can easily do this budgeting system at home, but it also means being super honest with your own expenses. Sometimes you might have to do this for three months to get an average of all your variable expenses throughout the three months.

This budgeting system cannot tell you how much you should spend on every single category. However, it helps you understand your expenses as a whole, including fixed expenses.

Then you can categorise your expenses and allocate your budget.

5 Ways to Save Money the Chinese Way

The first of the five main factors that the Chinese do to save money, is that they don’t indulge in luxury goods or goods that are just there as status symbols. The majority of Chinese people want to stay humble, and they also want to fly under the radar, so they usually stay away from luxury products.
When the Chinese earn money, they usually live off a very small percentage of their income. This simple principle of saving as much money as you can and living on as little money as possible really stuck with me. And I think it’s one of the main factors Chinese people adopt. This is an excellent rule when it comes to building wealth. However, please understand that this type of rule will create a ‘scarcity mindset’ about money. You must know that psychological trait. As you earn more money, you can shift your mindset toward abundance.
The Chinese save money by practicing frugal living and focus on their needs rather than their wants. Another wise lesson from them is that if you must spend money on something you need, go ahead and spend money. This is especially true when it pertains to your health. So, if you’re debating between a flimsy desk chair or an ergonomic office chair, that might make you more comfortable and stay healthier throughout the day, you might want to opt for that ergonomic chair. As far as ergonomic chairs are concerned, I would classify them as needs. Of course, you don’t want to take this logic to the extreme. For example, everyone needs clothes, but that doesn’t mean you need expensive Italian designer brands. This is just because they are perceived to be better in some way, because it’s a need. So here it is important to be reasonable with your spending and make smart choices and save where you can. Now when it comes to wants, you can still buy something you want, but make sure you get really good value. What do I mean by that? Well let’s say you want to buy a state-of-the-art mountain bike for £4000, because you really want this item. Well, you want to make sure you can use that bike for a long time. So that it amortises the cost of your use, could you use that bike for 4 years? Therefore, you would take that £4000 and spread it out over four years of usage. This comes out to less than 37 pence per day. Spending money is inevitable, and everyone will have to spend money at some point, but the lesson here is to be reasonable and frugal.
The fourth factor here is that if you’re trying to save money the Chinese would advise you to eat at home. Cooking your own meals is cheaper than takeout and encourages healthy eating. It may require more effort, but making breakfast or cooking dinner can also be a daily bonding ritual for you and your family members. I think this one is universal to most cultures. We know that eating out costs us more money on food than we need to. I remember growing up, we went out to eat every couple of weeks. Having friends and family over for dinner was more common. As a family growing up, that was our way of socialising. Eating out was mostly saved for special occasions like birthdays and anniversaries.
Teach your children about money as early as possible. Start by introducing the idea that things like television and lights cost money and that money needs to be earned by working. Work your way up to the importance of creating their own personal savings. You can even give small monetary rewards for chores as a starting point for saving money.

I hope some of these Chinese money saving tips inspire you to save and if they did, please let me know in the comments below. And as the Chinese would say during Lunar New Year’s ‘‘Gong Xi Fa Cai’’ which you now know means; I hope you get rich.

An Eastern Perspective: How Do The Chinese Save Money

perry

Perry Stevens is the founder of BIGPriceDrops and a long-time digital marketer with a practical interest in helping UK shoppers find better value online. He focuses on clear, no-nonsense money-saving content, Amazon UK deal insights, and buyer guides that help readers spot genuine savings without falling for misleading discounts or impulse-buy traps.

When he is not working on BIGPriceDrops, Perry runs Blend Local Search Marketing and works on digital projects covering SEO, AI tools, and online business growth. His approach is simple: help people make smarter decisions before they spend their money.

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