China investors pick stocks over savings

China investors pick stocks over savings

BEIJING - RECORD numbers of Chinese plan to enter the bullish stock market and fewer than ever are choosing to keep their money in the bank or spend their cash, according to a central bank survey released yesterday.

It said that 40.2 per cent of 20,000 respondents in 50 cities intended to buy either shares or mutual funds, dwarfing the previous record of 30.3 per cent set in the previous survey, conducted in the first quarter.

Only 26.3 per cent of those surveyed in the latter half of May still preferred to park their money in banks - the lowest proportion in six years, the People's Bank of China said on its website (www.pbc.gov.cn).

That extends a drop which began in the third quarter of last year, even though China has increased benchmark deposit rates three times since April last year.

The central bank said that by the second quarter of this year, bank deposits accounted for 52.3 per cent of households' financial assets, down from 68 per cent at the end of 2005.

Moreover, households' propensity to consume also dropped, with a record-low 19.5 per cent of households saying that they were planning to purchase big-ticket items.

REUTERS