Financial literacy is an essential skill for life. That is why the low results obtained in general by 15-year-old students in the PISA Report on Financial Literacy are cause for concern. Given this situation, it appears a good idea to analyze the country that is in 1st place in the ranking: What is China doing that others aren’t?
The regions of China (Beijing, Shanghai, Jiangsu and Canton) that took part in the PISA exam have headed the ranking in financial literacy with an average of 566 points, far above the average of 481 points for the countries in the Organization for Economic Cooperation and Development (OECD). Belgium, with 541 points and Canada, with 533, were next best in knowledge and skills in this subject, some way behind the Asian giant. What are the keys for explaining China’s results in the PISA assessment?
1. Before you act, measure
National policies designed to improve the level of the population’s financial literacy of have been decisive for China. However, before acting, the country’s financial institutions, headed up by the People’s Bank of China, carried out a macro-survey to determine the level of its citizens in this subject. The results, which are updated every two years, have been decisive in establishing a roadmap, guidelines for good practices and targets at national level, based on people’s real needs.
2. Impact campaigns
The national financial literacy policy in China prioritizes investment in educational resources for the youngest students, without forgetting adults. The different campaigns run on current issues related to financial literacy are very influential and have an extensive impact on the population. This guarantees that the contents reach all the regions of what is a very large country, in which there is a great diversity of population.
3. Study plans
China includes subjects related to financial issues and specific programs in its school curriculums. Financial literacy accompanies students all the way through their time in the classroom, from preschool to university. Specific contents are established at each stage that become more complex as students progress.
4. Good in numbers and reading comprehension
The PISA report points out that financial literacy is directly related (at up to 58%) to Math and Reading Comprehension skills. The ability to use knowledge in these two disciplines has been key for Chinese students to perform outstandingly in the assessment. According to Xue Hu, representative of the China Banking Regulatory Commission (CBRC), speaking at the fourth OECD/GFLEC conference: “Our high-school students are very good at calculating profits and net interest margins”.
5. The role of financial institutions
Currently, China is working on determining the role that financial institutions should play in educating students. Xue Hu considers that their role is key: “Financial institutions should contribute to financial literacy.” Among the contributions by companies in the sector, according to Xue Hu, there are some fundamentals such as the publication of material, the use of volunteers into schools, and training of teachers. In China the financial knowledge of professionals in the sector is highly valued, but always supervised by the competent bodies to guarantee neutrality. Some pilot projects have already been carried out, such as a course in Beijing that has been very well received by students, in which volunteers from these institutions have taught basic contents related to financial literacy and practical problems in the classrooms.
6. Interactivity and new technologies
China has made a great effort to offer content adapted to the age of students. Among the tools used in courses are comics, films, theater or videogames. All this is designed to promote the interest of young people and make learning easier. “The use of easy language accompanied by illustrations, technology and the social media, is effective,” insisted Xue Hu.
At the annual summit of the Center for Financial Education and Capability, the EduFin Summit 2017, prestigious experts will discuss in more detail the successful natural strategies that are being carried out in different countries to increase the level of financial literacy and improve the results of the 2015 PISA report. You can attend this summit by completing a registration form.
Meanwhile, the Center for Financial Education and Capability provides you with all the relevant information on financial literacy around the world.