Wed, Mar 20, 2019 - Page 6 News List

China working to enhance financial literacy among kids

The Guardian, BEIJING

Chinese elementary school textbooks might soon include definitions for terms like “price-to-earnings ratio” or “buy and hold” as the nation embarks on a campaign to improve investor awareness.

The Chinese Ministry of Education and the Chinese Securities Regulatory Commission (CSRC) were quoted as saying by Xinhua news agency that they would be working together to “increase financial literacy” among China’s youth.

The campaign to improve understanding of the nation’s securities and futures markets would begin with textbooks for elementary and middle schools, officials said.

For years, authorities have been trying to improve financial literacy as retirees or less savvy investors have lost their savings to risky schemes or fraud.

Against the backdrop of a slowing Chinese economy, maintaining citizens’ savings is even more critical.

Over the past year, thousands of Chinese have lost money in peer-to-peer lending schemes gone wrong and other online scams.

At least one person, a woman in Zhejiang Province, reportedly committed suicide after losing about US$40,000.

“This has great significance for maintaining social harmony and stability,” CSRC spokeswoman Gao Li (高莉) said on Friday last week.

China’s stock market, often described as a casino that bears little connection to the real economy, is dominated by retail investors who focus on quick returns and trade on online tips, rumors and, in some cases, superstition.

In January, stocks for companies whose names had the same Chinese characters as newly appointed CSRC Chairman Yi Huiman (易會滿) surged.

As China seeks new funding for cash-strapped companies and local governments, and opens the door to more foreign money entering its stock exchanges, it is looking to upgrade the sophistication of Chinese investors.

Tech companies have unveiled financial literacy apps for kids, while schools in cities like Shanghai, Guangzhou and Shenzhen have introduced related lessons.

In 2014, students in Shanghai scored the highest of any country on a financial literacy test conducted by the Organisation for Economic Co-operation and Development.

Officials said that they would also focus on improving the financial literacy of teachers, encourage universities to offer related courses to all students and find other “innovative” ways to improve understanding of markets, like internships or virtual trading.

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