In China, Banks Targeting Kids

Written by Wang Fangqing Tuesday, November 02 2010

Baby debit cards Photo courtesy of Industrial and Commercial Bank of China

SHANGHAI, China – Debit cards for kids have come to China.

The latest example is London-based Standard Chartered Bank, whose operation in Shanghai issued a platinum card in September for children (ages 10 to 17) of its Chinese clients. Simultaneous to the introduction of the card, the bank also set up a club for the young cardholders. Standard Chartered is the first foreign bank stepping into the domestic financial market for young people.

With the platinum card, parents can set the date, amount, and withdrawal limit for pocket money deducted from their Standard Chartered accounts. The goal is to help children learn basic financial management, according to the bank.

Club members will enjoy a string of courses on subjects such as painting and photography. And they will get the opportunity to travel abroad. But to keep the membership, the parents must have at least 700,000 yuan ($105,357.60) in deposit or investment at Standard Chartered.

Huang Shuang, head of retail banking products at Standard Chartered, says the card is specially designed for the Chinese families.

“Chinese parents are well-known for the willingness of investing in the future of their children, especially when it comes to education,” he says.

Answer Marketing Consulting, a Beijing-based research firm targeting Chinese teenage consumers, notes that education and health care are the top two areas in which Chinese parents want to invest on behalf of their kids.

China's largest lender, Industrial and Commercial Bank of China, introduced a debit card – a baby card – in June for new parents and parents to be who hold accounts at the bank.

Featuring the 12 Chinese zodiac signs, the baby card works somewhat like the Standard Chartered platinum card. But instead of including a club, Industrial and Commercial Bank partnered with a domestic insurance company to offer a baby health insurance package.

“Next, we will create a personal financing home page for the kids, teaching them how to use money wisely,” says an Industrial and Commercial Bank spokesman.

He adds that the nation’s one-child policy and fast-growing family income have brought Chinese children a substantial amount of monthly pocket money, “but only very few of them know about money management."

Per capita disposable income in China’s urban areas climbed to 17,175 yuan ($2,584.59) in 2009, up 8.8 percent from 9,135 yuan ($1,374.6) in 2008, according to the National Bureau of Statistics.

Debit cards for kids Photo courtesy of Standard Chartered Bank

Meanwhile, monthly pocket money for about 60 percent of Chinese teenagers ranges from 83 yuan ($12.50) to 416 yuan ($62.60), compared with less than 30 yuan ($4.50) a decade ago. Also, the average amount of weekly spending in 10 major cities is around 27 yuan ($4.10), according to a research conducted by the consulting firm Answer. The cities include Shanghai, Beijing, Guangzhou, Xi'an, and Chongqing.

The research shows that boys and girls get almost the same amount of pocket money and that both love to shop, but spend on very different items.

For example, for daily after-school shopping, girls are fond of cute stationery and accessories, while boys are attracted to snacks, toys, and comic books.

When they go to malls for some “big spending,” books, clothing, and toys are at the top of the shopping list for both boys and girls.

Unlike their Western counterparts, whose income frequently comes from part-time work, Chinese kids financially rely on their parents, says An Xianglong, research director at Answer.

Wang Fangqing (Frances Wang) is a freelance reporter based in Shanghai. For the past four years, she has been writing for a variety of English language publications, including Tobacco Journal International, Soap Perfumery & Cosmetics and Securities Industry News, reporting business trends in Asia. A Chinese native speaker, she is also fluent in Japanese and English.