- New survey of Chinese Americans on investing approach
- Report finds that Chinese are less likely to use financial advisors and more likely to rely on family and friends for advice
LOS ANGELES, Oct. 6, 2015 (GLOBE NEWSWIRE) — Nearly two-thirds of Chinese Americans believe the US is a more attractive place to invest in the wake of the global Great Recession and recent market fluctuations, compared to 43% of the rest of the US national population, according to the CTBC Bank Survey: Chinese American High-Net-Worth Investors released today by CTBC Bank USA.
The CTBC Bank report examines how affluent Chinese Americans exhibit distinctions in the way they view investing, respond to investment losses, and use third-party sources to inform investing decisions, among other differences.
CTBC consulted several prominent experts from the Brookings Institute, University of California, Los Angeles, University of Southern California, University of Michigan, and Queen’s University to put the findings into proper cultural and historical context.
“Our survey results illuminate the decision-making framework of a group that represents a growing part of the US population, and one that is highly educated and informed and one that has shown a proclivity to invest in businesses, real estate and the financial markets in this country,” said Noor Menai, President & CEO of CTBC Bank USA. “These findings will guide us at CTBC as stewards of the assets of many Chinese Americans and their families as well as inform all advisors to this community, including lawyers, accountants, wealth managers and other key influencers.”
The report revealed Chinese Americans generally exhibit a greater degree of control and self-direction when managing their finances compared to the broader population. In addition, they are generally more sanguine about US economic prospects and see the country’s capacity for innovation and the predictability in the factors that contribute to growth as hallmarks of its strength and attractiveness as an investment destination.
Premium on Innovation
The CTBC report found that Chinese Americans value innovation more than non-Chinese Americans when investing:
- 40% said they would be more likely to invest in a company that develops cutting-edge and innovative products compared to 30% of the National sample.
- 72% see innovation as strength of the U.S. economy, versus 56% of the National sample, and 38% see predictability an area of strength in the country, compared with just 24% nationally.
“You might think predictability and innovation don’t mesh, but in fact for Chinese Americans they are intimately intertwined,” said Clayton Dube, Director of the US-China Institute at USC, who reviewed the survey results. “To be a reliable economic performer in the future you must have some mechanism by which you systematically produce innovative products and services.”
Among the salient findings, over three-quarters (77%) of Chinese-Americans agreed that “It’s important to me that I have complete control over my finances,” versus only two-thirds of the National sample.
Long-Term Orientation: An Eye on Retirement
Chinese-Americans exhibited interesting behaviors that suggest a long-term orientation when approaching investing and managing their finances to provide for the future.
- 25% selected “Generally saving for the future” as their primary goal when investing, versus 15% of the National audience. The trend was especially pronounced for Chinese immigrants: 54% versus 39% of Chinese Americans whose parents or grandparents immigrated.
- 45% said they would refrain from attempting to recoup investment losses immediately versus 32% of the National audience.
- 32% ranked retiring comfortably as the top sign of financial success, versus 23% of the National sample. One-third (31%) said that retiring early is an important objective, versus 22% nationally.
The recent history of immigration for many in the survey may mean that many had to leave jobs in their home country to come to the United States, which can exacerbate a sense of insecurity that comes with being an immigrant, according to Cindy Fan, Vice Provost for International Studies and Global Engagement at UCLA. “A strong desire to retire early may be attributed to the sense of security that Chinese-Americans are trying to achieve,” added Ms. Fan, who reviewed the report findings. “All immigrants in a host society probably do not feel as safe in terms of their long-term financial stability compared with the native-born.”
Weighing Third-Party Information when Investing
The report uncovered interesting distinctions in the sources of information where Chinese American rely on for investing insights.
- 72% say they trust news coverage when making a financial or investment decision, compared to just over half of the National sample (52%).
- 29% of Chinese-Americans selected family and friends as a top three choice of sources most often used for financial and investment decisions, compared to just 15% of other Americans.
- 35% ranked analyst reports as their top source of information, compared to just 14% of the National sample.
“Compared to other Americans, Chinese Americans are more likely to engage in holistic or dialectical thinking, which means they take more information, including contradictory info, into account while making decisions,” said Li-Jun Ji, Associate Professor of Psychology and Director of the Culture and Cognition Lab, Queen’s University. “They think more information is relevant in their decision-making than other Americans. This can help explain their reliance on analyst reports, which would allow them to take on much more perspectives.”
For a full copy of the survey, please click here.
About the CTBC Bank Survey and Methodology
The CTBC Bank Survey: Chinese American High-Net-Worth Investors was conducted online between August 21 and August 31, 2015. Respondents consisted of 130 immigrants and first-generation Chinese-Americans and a National sample of 130 non-Chinese Americans. Respondents were required to have total investable assets of at least $250,000 to qualify. A third Chinese Americans surveyed topped $1 million in investable assets. Over 90% of then either immigrated to the United States or have parents who did. More than half (60%) hold graduate degrees. It compared these findings to responses from high net worth investors of non-Chinese descent from the broader population.
About CTBC Bank Corp. (USA)
CTBC Bank USA is a trusted and established institution providing commercial and retail customers with a real financial bridge to the next state of their lives and businesses. Founded in 1989 and headquartered in Los Angeles, CTBC Bank operates branches in California, New Jersey, and New York. The bank’s operations include deposits, loans, credit cards, foreign exchange, letters of credit, wealth management, mobile, and electronic banking services. Customers benefit from access to large bank resources coupled with individual attention and customized service of a small bank. Its parent company, CTBC Bank Co. Ltd., is supported by nearly $100 billion in assets and is among the largest banks in the world in terms of capital. For more information about CTBC Bank, visit www.ctbcbankusa.com.
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