Bank savings, function of people's income makes an important source of capital to financial institutions in China. Against a big drop of poke in 1996 and 2000, the country's bank deposits this year have been under recovery and growth as a whole amidst relapses. Comparing a sustained speedy rise of poke in 1998 and 1996, the growth speed has much slowed down.

The direct cause for a growth recovery of bank deposits in China lies in a greater slashed amount of stocks issued this year than last and a cut of high profit gains from market irregularities reined in by supervisory departments over stock markets. Because of impacts of stock market operations people began to exercise greater caution in investing in stock markets, resulting in a decreased amount of bank deposits to be diverted. Also contributive to this was an increase of salaries to increase the livelihood of public servants and employees in government institutions and a growth of income by people in town and country.

According to experts' analysis, increased money on deposit by people pinpoints at weak market consumption and there must also exist some hurdles hindering consumption. A recent survey by the People's Ban of China shows that people keep their personal deposit account at call in banks mainly for education, buying a home, and as savings for old age. As things stand in today's China, for most Chinese customers they form still no big buying force. For various reforms as housing, medicare and education being carried out people however begin to acquire some confidence in their buying ability and cope with a life of spending demand. In contrast, a large number of employees working in civilian-run enterprises are still living in a way to place more money on deposit against unexpected needs for a small amount of welfare funds provided. The farmers are also found a weak consumption remaining still as they are at a low level of income. All these have, amongst the others as irregular market operation, irrational controls and fee collection in housing, car and tourism consumption, also seriously hindered the rise of a consumption market from bank deposits. Due to a sluggish world economy as of the US, Europe and Japan, and difficulties as facing export trade and investment, an expansion of domestic demand especially an expansion of consumption should play the main role in making an adjustment and pushing ahead of the Chinese economy. A sustainable economic growth this year also lies in a growth of consumption. Sustained increase of bank deposits reminds us that to stimulate consumption and open up the customers' money bag there is still much work to do for piloting greater success of the Chinese economy.

What is to be noted is that instead of a recovery and growth of bank savings there had appeared a negative growth of bank savings in China in May. At the end of May, 6. 8394 trillion yuan poke was registered to show a growth of 10 percent over the same period of last year. But by the end of April, with a total of 6.861846 trillion yuan of bank deposits in town and country, a drop of 22.446 billion yuan or 0.33 percent less was found in May, pointing to a relapse of bank deposits. In terms of the structure of bank deposits, demand deposits increased 24.3 billion yuan to show an increase of 41.5 billion yuan against 36.61 billion yuan of time deposits, or an increase of 239.6 billion increases over the same period of last year. An increase of time bank deposits shows that demand bank deposits in the past two years fell and were replaced by a growth of time deposits.

An increased amount of bank deposits topping over 7 trillion is an inevitable result of economic development in China. But this should have already been seen in China if not for a drop of bank deposits diverted into stock markets. Holding firmly on the right trend of economic development and cautiously choose the form of investment, it goes without saying, should be the focus of concern of investors.

(People's Daily 09/25/2001)