Banking News
- Chinese households ditch bank deposits in favor of stocks, funds, survey shows
Date: 21-Jun-2007 Sources: (Xinhua Online)
BEIJING, June 20 (Xinhua) -- Stocks and funds have overtaken bank deposits as the preferred investments of Chinese urban households, the country's central bank said in a survey released on Wednesday.
Of the 20,000 households surveyed in 50 large, medium- and small-sized cities nationwide in May, 40 percent said they favored stocks and mutual funds for investment. The proportion was 9.9 percentage points higher than in the first quarter of 2007.
Households who most favored bank deposits dropped 4.0 percentage points from the first quarter to 26.3 percent, the lowest in almost six years.
Chinese shares prices have surged 56 percent since the beginning of this year after climbing 130 percent last year. The bull market has attracted a huge influx of money from bank deposits as citizens seek high returns.
The survey shows 50 percent of households expected inflation toaccelerate, 5.9 percentage points higher than the first quarter.
China's consumer price index, the main gauge of inflation, rose3.4 percent year-on-year in May due to rapid hikes in food prices,0.4 percentage points higher than the target set by the Chinese government for the year of 2007.
According to a survey of 2,850 bankers by the People's Bank of China (PBoC) in the second quarter, the index that measures bankers' confidence fell to 37 percent, reversing the rebound in the earlier two quarters.
It said 58 percent of bankers expected the economy to continue to overheat and 43 percent expected tighter monetary policies in the third quarter.
According to a survey of 5,635 entrepreneurs conducted by PBoC in the second quarter, the index that measures entrepreneurs' confidence declined to 83.4 percent, the lowest in two years.
The index was 5.1 percentage points lower than the first quarter and 3.7 percentage points down on the same period last year.
The decline came as entrepreneurs began to worry about overheating in China's economy. The proportion of entrepreneurs who believe the economy is overheating has jumped to 14 percent from 7.9 percent in the first quarter. The rate is the highest since the first quarter of 1994.
The survey said the appreciation of China's currency, the yuan, and adjustments to export tax rebates had had limited impact on exporting and importing companies, although they helped curb to some extent rapid growth in exports.
Nearly 30 percent of entrepreneurs said the index that tracks domestic and overseas orders rose to a record high of 12.9 percent and 9.7 percent respectively due to booming market demand.
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