I have been following the efforts of various Chinese subsidiaries of big Western retail brands to get consumers in the world’s most populous country to start using their credit cards. After all, as a WSJ report recently noted, three-quarters of middle class Chinese urban dwellers own credit cards, but only nine percent of them are actually planning to use them this year.
Well, as we keep being told that a substantial increase in Chinese domestic consumption is just what the doctor ordered for a struggling world economy, I couldn’t help but wonder what the Chinese credit card statistics would look like if the country’s consumers took up the task of saving the world in a serious way and began using their cards like the Americans do. So, mostly for fun but also out of curiosity, I did some basic extrapolations and here is what I came up with.
If the Chinese Used Cards as Americans Do…
I looked into the data from the 2010 population censuses conducted in the U.S. and China. At that time, the U.S. population was estimated at 309 million and there were more than four times as many Chinese residents — 1,340 million. Now let’s see what the Chinese payment card data would have looked like if the country’s residents had access to the same brands of cards and at the same terms and had the same usage pattern as their American counterparts.
All U.S. data in the tables below are for 2010, unless otherwise stated, and are compiled from a number of different sources, but are conveniently aggregated in one place by CreditCards.com.
1. Cards and cardholders.
|American Express cards||48.9 million||212.2 million|
|Discover credit cards – 2009||54.4 million||236.1 million|
|MasterCard credit cards||143 million||620.6 million|
|MasterCard debit cards||119 million||516.5 million|
|Visa credit cards||269 million||1,167.5 million|
|Visa debit cards||399 million||1,731.7 million|
|Cardholders||181 million (projected)||785.5 million|
2. Transaction count and purchase volume.
|AmEx credit purchase volume||$131.1 billion||569 billion|
|Discover credit purchase volume||$92.5 billion||401.5 billion|
|Visa credit purchase volume||$809 billion||$3.51 trillion|
|Visa credit transactions||9.4 billion||40.8 billion|
|Visa debit purchase volume||$1.05 trillion||$4.56 trillion|
|Visa debit transactions||28.6 billion||124.1 billion|
|MasterCard credit purchase volume||$479 billion||$2.08 trillion|
|MasterCard credit transactions||5.85 billion||25.4 billion|
|MasterCard debit purchase volume||$333 billion||$1,45 trillion|
|MasterCard debit transactions||8.46 billion||36.7 billion|
3. Credit card debt.
|Consumer revolving debt*||$857.4 billion||$3.72 trillion|
*Consumer revolving debt is made up predominantly of outstanding credit card balances.
The real-world Chinese data, however, look very, very different from the above figures. I should point out that, although all statistics are a form of a science fiction, Chinese statistics are known to be more fictional than most. Still, they are the only ones we have to work with.
So, according to report from the Lafferty Group, at the end of 2010 there were 230 million credit cards in China and the aggregate purchase volume on these cards was $748 billion for the year. Yet, although these numbers look rather paltry when compared to U.S. data, the growth rate in the Asian giant is very high. The same Lafferty report tells us that the number of credit cards in China grew six-fold between 2002 and 2010 and the researchers expect that by 2015 the country will lead the world in that category. More astonishingly, credit purchase volume rose by a factor of 156 for the period! So, although it may be unrealistic to rely on Chinese credit card spending to lift the world out of its present economic predicament, such hope may be much more reasonable when the next financial crisis strikes.
Image credit: Ceibs.edu.