China’s household deposits are growing rapidly, the central bank says it will gradually return to normal
China News Agency, Beijing, March 3 (Reporter Wang Enbo) Since last year, Chinese household deposits have increased significantly. Liu Guoqiang, vice-governor of the People’s Bank of China, said in Beijing on the 3rd that with the improvement of China’s macro-economy, residents’ confidence in consumption and investment will increase, and residents’ savings will gradually return to normal.
Liu Guoqiang said at a press conference held by the State Council Information Office that day that in 2022, Chinese household deposits will increase by 17.84 trillion yuan (RMB, the same below), an increase of 7.94 trillion yuan over the previous year. Since the beginning of this year, household deposits have continued to maintain a rapid growth momentum, with an increase of 6.2 trillion yuan in January, an increase of 790 billion yuan year-on-year. The increase in household deposits was mainly due to the impact of residents’ consumption and investment conditions, and the increase in liquidity preference.
On the one hand, the epidemic has a certain impact on residents’ consumption, and as consumption decreases, deposits increase accordingly. According to the People’s Bank of China depositor survey, in the fourth quarter of 2022, 61.8% of residents tend to “save more”, a year-on-year increase of 10 percentage points; residents who tend to “more consumption” account for 22.8%, a year-on-year decrease of 1.9 percentage points . Liu Guoqiang said that after the optimization of the epidemic prevention and control policy, consumption has been significantly released, but a heating process is still needed.
On the other hand, residents’ risk appetite decreased and investment growth slowed down, which boosted deposits accordingly. In the fourth quarter of 2022, residents who tend to “invest more” accounted for 15.5%, a year-on-year decrease of 8 percentage points. At the end of January 2023, the assets of asset management products of Chinese financial institutions totaled 95.9 trillion yuan, a year-on-year decrease of 2.4%, and the balance of funds of asset management products from the household sector was 40.9 trillion yuan, a year-on-year decrease of 2.5%. In addition, the Chinese New Year falls in January this year. As companies pay wages and bonuses before the Spring Festival, some corporate deposits are transferred to the household sector, so household deposits have increased.
Regarding the follow-up trend of residents’ savings, Liu Guoqiang said that after the optimization and adjustment of the epidemic prevention and control policy, the phenomenon of logistics and people flow has been significantly improved, the consumption scene has accelerated, and the preventive savings accumulated in the early stage are expected to be gradually released into actual consumption demand. A series of policies to promote consumption have been introduced and implemented, and the policy effects will gradually appear. In addition, the improvement of China’s economy will help enhance residents’ investment confidence, and residents’ investment will gradually return to normal levels.