sage_brennan

Weaning China Off Cash: There's No Silver Bullet

"The thinkers over at McKinsey & Company are becoming advocates of taking the cash out of China's cash-driven economy, something we in the Hutong heartily endorse."

As the McK piece says: "the reliance on cash makes it difficult for consumers to spend and for retailers to sell."

Despite my own personal preference for cashless transactions, I do not really understand what is so constrictive about using cash in China: everyone has access to and understands the value of cash as a medium of exchange. Are there any data to support this theory about the inefficiency of cash?

Perhaps over the longer term, cashless transactions will add value to overall GDP. But as China's economy currently stands, this entire debate is predicated on the wrong-headed assumption that China should throw money at a problem that doesn't need solving.