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Poll Shows Chinese Less Inclined to Save
According to a second quarter survey by the Bank of China, the inclination of Chinese living in towns to save has dropped as they become more conscious of a variety of financial investment opportunities. Confidence that their income will increase remains weak but their expectations that prices will continue to increase has not increased either.
58.6% of those polled in the second quarter chose to put their money in demand deposits, up from 56.3% in the first quarter. The percentage of those who chose one-year fixed deposits dropped to 22.7% this quarter from 25% last quarter.
Chinese town residents' inclination to save fell was reflected in this poll. In response to the question, "In the past three months, how much of your income goes into savings?" 43% answered "10% or less," 2.7% less people gave the same answer last quarter; 28.6% answered "20% or more," also 2.7% higher than last quarter. In response to the question, "Based on the current prices and interest rate levels, which option is best?" 23.9% answered "save more," down 3.4% from last quarter.
The main reasons for the decrease in savings are the soaring stock market and the centralized issuance treasury bonds. 10.9% of depositors selected treasury bonds as their current main financial asset while 9.2% chose stocks, up 2.6% and 1.6% respectively. 21.6% chose "treasury bonds" in response to the "Based on the current prices and interest rate levels, which option is best?" question, up 6.3% from last quarter.
The poll said that the income confidence index of township residents all over China was 2.5 and future income confidence index was 8.3, down 10.4 and 3 percentage points from last quarter respectively.
Consumption during the extended vacations during International Labor Day in May was strong. Sales increased 22% and service industry income 20% for the month.
According to the survey, 31.8% of those polled are preparing to purchase a large durable good, 26.1% a house and 7.2% a car.
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