On The Middle-class Household Financing Strategy In China

As a new profit grwoth of a bank, Personal Financial Services has been developing rapidly in China during the past years. By the end of 2002, the profits of Personal Financial Service is about 25 billion which is less than 10 percent of total profits of Commercial Bank, and its annual growth rate is 16.5%, according to Industrial and Commercial Bank of China. However, Personal Finacial Services have become a significant and stable source of profit of bank and the share of total profit is 40 to 70 percent in the developed countries. Obviously, the gap is huge. It makes the competition between the domestic and foreign banks increasing more and more.Acording to "China's 2007 report on Investors of personal financial products', the potential customers of personal financial service are the people with annual disposable income of 100,000 yuan. It means more and more middle class became the core customers of Personal Financial Service.This paper takes the domestic middle class family as study object. With analyzing the need of the middle class family in the Personal Financial Service, contracting the present condition of Personal Financial Service between dometic commercial banks and foreign banks, the paper will make a conclusion of the what difficults the customers will meet when they access to the Personal Financial Service market. Then the paper will present a new personal wealth management method. The new project claims that the commercial banks should take investment porfolion as personal wealth mangement strategy. According to the paper, there are three key elements in the domestic Personal Financial Service which are Family Wealth, Risk Prefrence and Family Life Cycle.Studying both on theory and technique, the paper design a new personal wealth management method whicht will be tested by some cases. Not only meet the needs on personal wealth management and bring attractive profits to the customers, the new personal wealth management method but also help the commercial banks creacte more customers and reach a higher profit growth. Therefore, a win-win situation will be coming to the customers and domestic commercial banks.Finally this paper gives some corresponding suggestions to the customers and commercial banks wich will improve the Personal Financial Service business in China.