General education could raise basic financial literacy

Improving access to general education could be a cost-effective method to improve basic financial literacy in China, said Xu Gan, a PhD student at Wuhan University.

Gan presented her research findings on the link between general education and financial literacy at the 8th Seminar on Asia and Pacific Economies held last month at XJTLU's International Business School Suzhou.

She explained that financial literacy is the ability to understand and effectively manage money, which is important in reaching financial goals and achieving financial stability.

Gan developed a series of questions about financial interest rates and inflation constraints to test the average level of basic financial knowledge in China. The outcome, she said, is that overall financial literacy needs improvement.

A solution, according to Gan, can be teaching financial literacy through general education – especially since Compulsory Schooling Law (CSL) has made it more accessible and affordable in China since 1986.

“Education has been found to have a strong and positive link to financial literacy. Since China’s general education has become more accessible, people who completed the entire course of general education usually show a stronger financial literacy than those who didn’t,” Gan said.

“While CSL gives people more educational exposure, it still needs to be expanded to cover more populations. Expanding access to general education could be a cost-effective way to raise the overall financial literacy in China.”

Annual event identifies development strategies

Gan was one of the speakers who presented 28 academic papers in total at the round-table event organised by XJTLU and the Asian Development Bank Institute. The ADBI is an Asian think tank based in Tokyo, Japan, which focuses on identifying effective development strategies for Asia and the Pacific.

This annual event explores topics related to international economies, with the Asia Pacific region and the Chinese economy a special focus. The seminar is part of the International Business School Suzhou (IBSS) efforts to promote research in these themes and build a network of researchers in the Asia and Pacific region. It serves as a forum for researchers to present papers and develop joint research.

This year's topics discussed at the round-table seminar included Fintech and financial literacy, banking and finance, digitalisation and firm productivity, international trade, China macroeconomy, and special topics related to the ADBI.

Attendees, some of whom attended virtually, included representatives of Wuhan University (China), Sun Yat-sen University (China), University College Dublin (Ireland), Dongbei University of Finance & Economics (China), Beijing Language and Culture University (China), Chinese University of Hong Kong, Shenzhen (China), Nankai University (China), Leibniz University of Hannover (Germany), University of Calgary (Canada), Shanghai Jiaotong University (China), Zhejiang University (China), Indian Institute of Technology (India), Suffolk University (United States), Jilin University (China), Anhui Jianzhu University (China), Zhejiang Gongshang University (China), Guangdong University of Foreign Studies (China), University of International Business and Economics (China), Southwestern University of Finance and Economics (China), South China University of Technology (China), Northwest A&F University(China), Capital University Economics and Business (China), Xi’an Shiyou University (China), XJTLU and ADBI.

By Ke Tang
Edited by Tamara Kaup