Chinese Household' Option Of Financial Portfolio And The Wealth Distribution Effect

Compared with the traditional company finance, household finance is becoming a research keystone of burgeoning finance theory. It develops the theoretical frame of household portfolio by adding uncertainty. The conclusion of the research can supply valuable suggestions to the structural optimization of household financial asset, reformation of financial market and enaction of macroeconomic policies. It also has specially important and realistic meaning to China, who is seeking increase of property income, breakpoint of expanding consumption demand and making financial reforms.The article has made a research on choice of household financial portfolio in China, using methods including comparative study, combination of theoretical and empirical research. First, through comparative research, it concludes the heterogeneity of the household financial portfolio choice in China. Following, it analyses influences of household choice between consumption and saving, deposit and stock, imposed by uncertainty of income and financial asset return faced by household. Then, it concretely analyses the influences of household financial portfolio choice, which is imposed by the financial market scale and structure, supply of financial products and investment channel. Finally, it researches the effect of house financial portfolio choice under the conditions of widening gap of wealth, namely the wealth distribution effect resulting from the house financial portfolio choice.The main creative conclusions in the paper include:firstly, compared with the financialization, risk-securitization and intermediation in developed countries, the household financial portfolio choice in china takes a looks of heterogeneity with low risk, which deposit is a main choice. Secondly, uncertain expectation of income and expenditure makes household to increase saving through decreasing consumption, and to look for financial asset with steady return. Meanwhile, uncertain expectation of financial asset makes risk-aversion household seek for low-risk asset. Furthermore, with increasing of household wealth, household is seeking for risky asset with enough risk premiums. Thirdly, small scale, imbalance of product structure and obstructive investment channel of bond market in China makes it supply insufficient low-risk asset with steady revenue, China's stock market can supply enough risky asset with high premium to compensate the risk. So households are forced to deposit in banks. Fourthly, a unitary structure, low development and low participation of institution investors make capital market short of long-term ones. Absence of long—terms institution investors, short-term investment behavior, deficiency of supply, high cost make insufficiently them decrease participant cost and supply financial product with steady return. All of them make household investor participation stock market insufficiently. Finally, theoretically, ratio of stock and fund in all financial assets hold by households remarkably affects wealth accumulation in the future. Wealth distribution effect of household finance portfolio is related with the instruments of investment. Besides, it is affected by the policy of security market and normality of investors' behaviors. It demonstrates by experiential analyses, decreasing of interest share in revenue of financial assets and small increasing of centralization, comparison between the highest and lowest income groups, has a less affect on the gap of household financial revenue. The increasing dividend share and large ascending centralization is an important factor of the expanding gap of the house financial revenue. The paper demonstrates through theoretically and experiential analyses:the choice of household asset in China, especially the stock, is an important factor of the expanding gap of the household financial revenue.