Source: Global Times Published: 2015-12-15
Students design investment products at the Junior Achiever Financial Literacy Challenge on Saturday. Photo: Courtesy of JA China Shanghai Office
"What does the Li Keqiang index refer to?" "What is the systematic risk in security investment?" While these financial questions are beyond the comprehension of many adults, last weekend 40 students from 10 Shanghai high schools answered them like professionals. They were competing in the Junior Achiever Financial Literacy Challenge and these junior finance gurus were seen using not just their IQs and EQs (emotional quotients), but also their FQs (financial quotients).
In the morning session of the challenge each team had to answer difficult and tricky questions about finance. In the afternoon, the participants had to design investment products for either university students or retired people. They analyzed the characteristics of their potential clients, evaluated the investment risks of the products, calculated anticipated returns and designed persuasive marketing plans.
Looking at the sophisticated performance the students gave begs the question: "How can these high school students understand these advanced economic theories as well as business school students? And how can they master the skills and knowledge to develop practical financial products like finance professionals?"
The reason is that more and more Shanghai high school students are studying finance at this level. Chen Yuzhen is a student from the Shanghai Shixi High School and he admits he loves money but thinks there`s nothing wrong with that. "Life is short, and I think the most important thing for living is to experience as much as possible. And money is the basic requirement if you want to experience the world."
Chen`s understanding of the financial world seems far beyond the grasp of an average high school student, but he is not an exception. Nowadays many Shanghai students are learning about the way money works.
"The reason I study finance is to better prepare for my future. I want to undertake scientific research in the future but this needs lots of money. To back up my career, I think I need to learn the knowledge and skills to grow my financial future," Xu Linglan, a high school student from the Shanghai Yan`an High School told the Global Times. For her, money will pave the way for her academic and scientific future.
Most of those taking part in the challenge said they were doing this out of interest and they believed that the ultimate goal of studying finance like this was to manage their own assets and arrange their lives accordingly, rather than just seeking profit.
Chen said it was enough for most of the students to have an awareness and interest in finance. "The knowledge and the skills don`t have to help us make money immediately. In fact, I think the best investment for high school students is to study hard - the knowledge we gain in school is more profitable than any financial investment."
According to the 2014 Program for International Student Assessment (PISA), which rated the performance of about 29,000 students from 18 countries and economies, Shanghai students have the highest international average score in financial literacy.
Financial literacy is defined as the set of skills and knowledge that allows an individual to make informed and effective decisions with their financial resources.
The prize winners pose for a photograph. Photo: Courtesy of JA China Shanghai Office
Parents in Shanghai tend to nurture the financial intelligence of their children from an early age. "When I was 13 I knew nothing about finance. But one day my father opened a bank account for me, and bought me a fund. It yielded profits after a year. And then I used the profits to buy stationary for the next year," said Tao Chen, a student from the Shanghai Shixi High School.
Xu Linglan, the student from the Shanghai Yan`an High School, told the Global Times how her father taught her about finance. "About a year ago, I told my father I wanted an iPad. Then he suggested I sold my old iTouch first, and suggested I invest some of my New Year gift money in the stock market. Eventually I made a 3,000-yuan ($463) profit on the stock market, and bought an iPad with that."
Another student, Cao Zheyi, from the Shanghai Foreign Language School, told the Global Times, her parents were always telling her that people cannot live without money. "They believe learning how to earn and use money is a lifelong task. So they have been encouraging me to improve my financial intelligence from an early age."
An elective course
Sun Zhong is the director of the JA China Research and Publishing Center and said Shanghai was the first Chinese city to introduce finance to elementary education. Though finance and economics are not a compulsory part of the syllabus in Shanghai schools, many primary and middle schools are now offering it as an elective course.
Yang Wenqiang, a senior politics teacher from the Dongchang Middle School Affiliated to East China Normal University, introduced elective finance courses to his school in 2009 and the courses were open for grade 10 and 11 students. "Now these courses have become part of our featured curriculum." He said that apart from eight elective finance courses, his school also had an innovative finance lab that lets students experience virtually banking systems and securities trading processes.
Yang said that alongside the reforms in education in China, schools in Shanghai were striving to attain a more complete development of their students, aiming to improve the overall quality rather than just encouraging academic performances.
"Of all the skills that students need, the ability to manage money is a most important one, because no one can live without money, and everyone needs to protect and grow their financial future. So through our finance courses, we hope our students will be able to better manage their finances and lead better lives," Yang said.
Li Jing, a math teacher and the organizer of the finance course at the Weiyu High School, told the Global Times that her school added finance to its curriculum in 2004. "The finance course happens once a week for interested grade 10 students," Li said, "The course content is very close to students` everyday lives. In the classes, students study a wide range of practical financial aspects like managing money and setting up companies through different group activities."
She said that originally they had only planned to enroll 40 students, but because the students responded well, they had expanded the class to 48 students.
Both the teachers said the finance courses were helping students make better choices for their majors and career paths. "Through elective finance courses, and activities like visiting banks and talking with financial experts, students can get to understand this discipline and industry before choosing their university major. If they feel they are not suitable for finance, they can change direction before it is too late," Yang said.
Students analyze the financial characteristics of a potential client. Photo: Courtesy of JA China Shanghai Office
Having an edge
Shanghai is the Chinese mainland`s commercial and financial center. Growing up and living here probably gives the citizens an edge for financial literacy.
"It is interesting that while Shanghai`s students, parents and teachers are very supportive of cultivating young students` financial intelligence, this is not that widely accepted in Beijing or Guangzhou. Financial intelligence seems to be regarded as a basic quality in this financial hub," director Sun Zhong said.
Teacher Li Jing from the Weiyu High School also acknowledged the city`s influence on Shanghai`s younger generation. "The business and finance culture is very strong in Shanghai. Many of my students look up to finance professionals, corporate executives, and successful entrepreneurs, and regard them as role models. In aiming to be future business and financial leaders, young students are more self-motivated about gaining extra finance skills and knowledge."
She also pointed out that compared to parents in other Chinese cities, parents in Shanghai were more likely to work in finance and business.
A positive move
Dong Ximiao, an economist from the Chongyang Institute for Financial Studies at the Renmin University of China, believes the finance courses for school students are a positive move.
"Influenced by the rapid development of the Chinese economy, today`s younger generation have more awareness and interest in finance and are more willing to learn to better manage their wealth," Dong said, "This is a good thing because no one can avoid dealing with money throughout life and learning about finance at a young age could help them form proper attitudes about money so that they realize it is about the responsible management of their future life and families, rather than just a method of generating profit.
"Parents and teachers should control the amount of their investments and advise young people to choose low-risk investment plans, like buying monetary funds, rather than putting money into high-risk stock markets," Dong said.
At the end of the challenge, Judy Wu, the director of JA China Business and Program Development, said: "Today`s younger generation will be the main contributors to the world economy in the future. Regardless of their occupations, financial literacy will be a fundamental essence of their future work and life."
After a day`s ferocious competition at the challenge the student teams from Weiyu High School and Yan`an High School claimed the 1,500-yuan first prizes.