As the U.S. grapples with soaring gas prices, many pundits have put the blame for the rise on the shoulders of the frenetically expanding economies in China and India. There's just too much demand and the market can't keep up, they say.
Want proof of just how fast that Chinese economy is growing? Try this: The total number of credit cards in China nearly doubled in the past year, according to the People's Bank of China, which is the nation's central bank.
A recent report at ShanghaiDaily.com (article included below) laid out the details: "China had more than 104.73 million credit cards in circulation at the end of March, up 92.9 percent since a year ago."The report goes on to say that "China's total bank cards, including debit and credit cards, topped 1.58 billion by March 31, up 29.1 percent over the year." As those numbers indicate, debit cards are far and away the most popular choice of plastic. They make up 93 percent of the card market. Still, a near doubling of the number of credit cards in the world's most populous country is an event that is sure to draw attention, especially as companies from around the world race to do business in China.
This growth coincides with a spending boom in India, the world's second-most populous country. The WashingtonPost.com has a fascinating article about buying habits of the 20- and 30-somethings in India. The article says younger Indians are charging items like flat-screen TVs, iPods and sunglasses in ever-growing numbers. The big problem in India: huge interest rates. According to the Washington Post, "In India, even the lowest credit card interest rates hover around 20 percent, and the average lending rate is 34 percent, which includes a 12 percent service tax on the interest." Holy Cow! (as the late great Harry Caray would say!)
That's two to three times the average lending rate for cards in the U.S., according to CreditCards.com's latest rate report. Add on the Indian government's "service tax" on the interest, and those rates for consumers in India become downright outrageous. The prevailing thought seems to be that this Asian growth isn’t going to stop anytime soon. Can it continue at the breakneck pace that we’re seeing now? Noper...growth like this never lasts forever, especially when it may be creating a generation of folks buried in debt with 34 percent APRs. It certainly bears watching, though, as Americans deal with their own credit card burden.
Here's the article from the ShanghaiDaily.com...
Number of China's credit card holders doubles in quarter
Created: 2008-6-25 - Author:Zhang Fengming
THE number of Chinese credit cards almost doubled in the first quarter, the central bank said yesterday. China had more than 104.73 million credit cards in circulation at the end of March, up 92.9 percent since a year ago, the People's Bank of China said yesterday on its Website.
China's total bank cards, including debit and credit cards, topped 1.58 billion by March 31, up 29.1 percent over the year, the central bank said. Debit cards still dominate China's bank card market, accounting for 93.4 percent of the market total.
Bank card-based transactions accounted for 25.6 percent of the country's total retail sales, up from last year's 21.9 percent. Transaction value on bank cards rose 58 percent year on year to 824.6 billion yuan (US$119.5 billion).By the end of March, 203 institutions, including 168 domestic banks, had joined UnionPay, the sole trans-bank transfer system in China. China is adding point-of-sale card terminals at shops and restaurants to ease payments by bank cards, especially in the run-up to the Olympics when a large number of foreign tourists is expected.
Banks are also installing more automatic teller machines to extend their networks.About 804,500 merchants accept bank cards while there are 137,600 ATMs on the mainland. Encouraging the use of bank cards help cut money laundering and make it easier to track merchants' business transactions and tax payments.
Global banking executives see China's credit-card business as promising, although no quick profits are expected within three years, an industry survey said earlier. Bank of East Asia issued its yuan-backed debit cards in May, the first overseas bank to issue yuan-denominated bank cards in China. Banks including HSBC and Standard Chartered are awaiting regulatory approval for their own cards.
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Want proof of just how fast that Chinese economy is growing? Try this: The total number of credit cards in China nearly doubled in the past year, according to the People's Bank of China, which is the nation's central bank.
A recent report at ShanghaiDaily.com (article included below) laid out the details: "China had more than 104.73 million credit cards in circulation at the end of March, up 92.9 percent since a year ago."The report goes on to say that "China's total bank cards, including debit and credit cards, topped 1.58 billion by March 31, up 29.1 percent over the year." As those numbers indicate, debit cards are far and away the most popular choice of plastic. They make up 93 percent of the card market. Still, a near doubling of the number of credit cards in the world's most populous country is an event that is sure to draw attention, especially as companies from around the world race to do business in China.
This growth coincides with a spending boom in India, the world's second-most populous country. The WashingtonPost.com has a fascinating article about buying habits of the 20- and 30-somethings in India. The article says younger Indians are charging items like flat-screen TVs, iPods and sunglasses in ever-growing numbers. The big problem in India: huge interest rates. According to the Washington Post, "In India, even the lowest credit card interest rates hover around 20 percent, and the average lending rate is 34 percent, which includes a 12 percent service tax on the interest." Holy Cow! (as the late great Harry Caray would say!)
That's two to three times the average lending rate for cards in the U.S., according to CreditCards.com's latest rate report. Add on the Indian government's "service tax" on the interest, and those rates for consumers in India become downright outrageous. The prevailing thought seems to be that this Asian growth isn’t going to stop anytime soon. Can it continue at the breakneck pace that we’re seeing now? Noper...growth like this never lasts forever, especially when it may be creating a generation of folks buried in debt with 34 percent APRs. It certainly bears watching, though, as Americans deal with their own credit card burden.
Here's the article from the ShanghaiDaily.com...
Number of China's credit card holders doubles in quarterCreated: 2008-6-25 - Author:Zhang Fengming
THE number of Chinese credit cards almost doubled in the first quarter, the central bank said yesterday. China had more than 104.73 million credit cards in circulation at the end of March, up 92.9 percent since a year ago, the People's Bank of China said yesterday on its Website.
China's total bank cards, including debit and credit cards, topped 1.58 billion by March 31, up 29.1 percent over the year, the central bank said. Debit cards still dominate China's bank card market, accounting for 93.4 percent of the market total.
Bank card-based transactions accounted for 25.6 percent of the country's total retail sales, up from last year's 21.9 percent. Transaction value on bank cards rose 58 percent year on year to 824.6 billion yuan (US$119.5 billion).By the end of March, 203 institutions, including 168 domestic banks, had joined UnionPay, the sole trans-bank transfer system in China. China is adding point-of-sale card terminals at shops and restaurants to ease payments by bank cards, especially in the run-up to the Olympics when a large number of foreign tourists is expected.
Banks are also installing more automatic teller machines to extend their networks.About 804,500 merchants accept bank cards while there are 137,600 ATMs on the mainland. Encouraging the use of bank cards help cut money laundering and make it easier to track merchants' business transactions and tax payments.
Global banking executives see China's credit-card business as promising, although no quick profits are expected within three years, an industry survey said earlier. Bank of East Asia issued its yuan-backed debit cards in May, the first overseas bank to issue yuan-denominated bank cards in China. Banks including HSBC and Standard Chartered are awaiting regulatory approval for their own cards.
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THE number of individual bank accounts in China rose 9.6 percent from a year earlier to more than 2.2 billion during the first quarter of 2008, the People's Bank of China said yesterday. On average, each Chinese...
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