CHINA
Personal savings hit record US$1.7 trillion
By Zhang Ran (Chinadaily)
Updated: 2006-01-17 05:39
China's personal savings rose to a record 14 trillion yuan (US$1.7
trillion) at the end of last year, mainly because people put aside more
money to pay for education, health care and housing, analysts said
yesterday.
A resident counts RMB banknotes at a branch of Agriculture Bank of China
in Liaocheng, East China's Shandong Province January 16, 2006. [newsphoto]
The People's Bank of China (PBOC), the central bank, said on Sunday that
savings reached 14.1 trillion yuan (US$1.74 trillion), or more than
10,000 yuan (US$1,200) per capita.
The figure was 12.6 trillion yuan (US$1.56 trillion) for 2004.
Yet, even as people get richer, they have become more cautious in their
spending.
"People are forced to save for future expenditure," said Peng Longyun, a
senior economist with the Asian Development Bank's Resident Mission in
China.
According to an earlier report by the Chinese Academy of Social Sciences,
education, housing and medical costs have become the "three mountains"
weighing on the shoulders of the Chinese people.
In addition, culture and tradition are also factors behind the high
savings rate.
"Compared to Americans, Chinese people are more inclined to save their
money in banks rather than spend it," said Qi Jingmei, a senior economist
with the State Information Centre.
The lack of sophisticated wealth-management services and products also
contributes to high savings.
"Wealth management in China is still in its infancy. Although people want
to invest, they don't have many channels." Qi said.
She added that services provided by banks for common people are
particularly limited, leaving them with no option but to save.
Public consumption contributed only 37.8 per cent to China's gross
domestic product in 2004, compared to 60 per cent in the United States.
Critics have noted that China's economy relies too much on investment,
which accounts for 48.1 per cent of its GDP.
The government has already announced tax policies to redress the balance
between investment and consumption, such as raising the threshold for
personal income tax.
Yet the country is unlikely to see a big surge in consumer spending in
the next few years, said Qi.
"Spending is individual behaviour. I am afraid the high saving rate will
last for 10 years," she said.
In the past decade, Chinese spent only 60 per cent of their income,
compared to nearly 80 per cent worldwide, according to the National
Bureau of Statistics.
(China Daily 01/17/2006 page1)
<br
Most Commented/Read Stories in 48 Hours
� Bird flu control long-term task: Vice Premier
� Top legislature mulls abolishing agricultural tax regulation
� Hebei court hears deadly land dispute case
� Top legislature mulls abolishing agricultural tax regulation
� Top legislature mulls abolishing agricultural tax regulation
Today's Top News
Top China News
�CPPCC calls for fight against 'Taiwan independence'
�Commercial bribes of top concern
�Organ transplant regulation drafted
�Minister: China risks environmental disaster
Chinese School
No comments:
Post a Comment