World Bank: Chinese rural villagers opening bank accounts in record numbers

WASHINGTON, April 17 (UPI) -- Rural banking is rising in less developed areas of China, indicating Beijing is ramping up rural development through the establishment of state-owned banks in the rest of the country.

The number of rural residents with a bank account was up 74 percent in 2014, reported The Wall Street Journal, up from 54 percent from 2011. The numbers indicate China's rural and urban populations are closing the gap on personal banking.

According to World Bank data for 2014, 79 percent of all Chinese have an account, which is also up from 64 percent in 2011.

Basic financial services in China's hinterlands have been lacking in the past. State-owned banks have avoided building branches, citing costs.

But the rise of transfer payments to rural residents for health care, agricultural subsidies and senior citizen support have made it necessary to pay recipients through electronic funds transfers.

Leora Klapper, an economist for the World Bank, said the government-to-person transfers are responsible for the surge in rural banking.

"Two-thirds of [Chinese] government transfer recipients receive their payment to an account," she said.

In a separate report the World Bank noted China's growth will slow to 6.9 percent by 2017, down from 7.4 percent in 2014.

Structural reforms, a gradual withdrawal of fiscal stimulus, and continued measures to slow credit expansion were cited as leading causes for the marginal slowdown in China's growth rates.