Chinese households build up savings amid COVID-driven uncertainty

Credit: Shen Xinyi / SHINE

Chinese are saving more during the COVID-19 pandemic, with household deposits jumping by a record-high 10.33 trillion yuan (US$1.53 trillion) in the first half, latest data from the country's central bank showed.

Between January and June, China saw its yuan deposits grow by 18.82 trillion yuan, an increase of 4.77 trillion yuan over the same period of last year, according to the interim financial data report from the People's Bank of China.

Among the savings, more than half came from households, while non-financial enterprises contributed around 5.3 trillion yuan.

The explosion of savings in the first six months has greatly overshadowed figures in the past few years.

For instance, household deposits rose by 7.45 trillion yuan, 8.33 trillion yuan and 6.82 trillion yuan, respectively, in the first half of 2021, 2020 and 2019.

Shanghai resident Sophie Huang said she is now putting close to half of her income in banks, while in previous years, only 30 to 40 percent of her money would be put into bank accounts.

"I have cut my spending on travel and tourism; instead, I am building up savings amid uncertain economic prospects," she said, admitting she earns less now than before the coronavirus outbreak.

Dong Ximiao, chief researcher of Merchants Union Consumer Finance Co, told chinanews.com that people's strong willingness to save is partly due to the impact of the COVID-19 pandemic, which has hurt their intent to spend.

Meanwhile, the volatility of capital markets around the globe has dampened investors' risk appetite, helping channel money from assets such as stocks and funds into deposits, Dong added.