From Cultural Inheritance to Financial Decision-Making: Confucian Culture and Precautionary Saving in China

This study investigates the relationship between Confucian values and household precautionary saving, particularly how modern financial practice may be influenced by traditional values. It draws on data from the China Family Panel Studies covering the 2010–2022 period, supplemented by geographic data, to examine the relationship between household precautionary saving and three elements of Confucian culture: familism, educational emphasis, and guanxi (a Chinese concept of interpersonal connections) networks. Ordinary least squares (OLS) regression with fixed effects—along with mediation analysis, heterogeneity testing, and two-stage least squares estimation—confirm that all three elements contribute positively to household precautionary saving, with guanxi networks exerting the strongest effect. The findings highlight that financial literacy serves as a mediating variable in the saving–education relationship but accounts for only 7.1% of the total effect. Heterogeneity analysis reveals that familism has a larger effect on higher-income households, while the effects of educational emphasis and guanxi are broadly consistent across income levels, supporting the notion that Confucian values continue to shape modern financial behavior in China. These findings underscore the need for financial literacy programs that include culturally relevant approaches to increase overall household financial security.