Nearly a third of retail sales on the mainland last year were conducted using bank cards as Chinese financial institutions rapidly expanded electronic banking services nationwide.
The People's Bank of China said yesterday that the number of bank cards on the mainland hit 2.07 billion by the end of last year, 270 million more than the previous year.
Their increasing use boosted the nation's retail sales and shored up economic growth last year, helping China brave the global slowdown, said Su Ning, a deputy governor of the central bank. Retail sales worth four trillion yuan, (HK$4.55 trillion) or 32 per cent of the total in 2009, were transacted through bank cards, the statement said.
Overal retail sales climbed 15.5 per cent to 12.5 trillion yuan last year as Beijing offered incentives such as tax cuts and subsidies to encourage the purchase of cars and home appliances. In 2008, 24.2 per cent of retail sales were made using bank cards.
'Online shopping grew fast last year and it was one of the major driving forces for the increased use of bank cards,' said Gan Hua, an official with China UnionPay, the mainland's sole domestic interbank card operator. 'At the same time, the fast-growing business has resulted in an increasing number of credit card defaults.'
Online market analyst firm iResearch said in a report that mainland online transactions were valued at 576.5 billion yuan last year, more than double that of a year earlier. By the end of 2009, Chinese banks had issued a total 190 million credit cards. Last year alone, they issued 48 million new credit cards.
Beijing intensified the crackdown on crimes involving credit card use late last year amid soaring unpaid credit card debts.
The central bank said 7.43 billion yuan of credit card debt had been at least six months overdue by the end of September. The amount of unpaid debt surged 126.5 per cent from the beginning of last year, representing 3.4 per cent of the total outstanding credit card debt.
The deputy governor of the central bank said China would intensify its oversight and supervision of banking cards to ensure the healthy growth of e-banking business.
In December, the Supreme People's Court and the Supreme People's Procuratorate said that card holders would face charges if they failed to pay the settlement three months after receiving the second notice letter from banks.
Bank cards help China brave global slowdown
The number of bank cards that are now on the mainland: 2.07b