You saved 35 trillion in two years, why don't you consume it?
Polarization is not only reflected in the concept of consumption, but also in saving.
According to the latest data from the People's Bank of China, domestic households will add about 16.67 trillion yuan in deposits in 2023, the second highest in history, and the balance of mainland deposits will rise to 137 trillion yuan at the end of the year, hitting a new record high.
On average, from 2022 to 2023, the mainland's new deposits will hit a new high for two consecutive years, with a cumulative deposit of up to 35 trillion yuan.
The total GDP of the mainland is only more than 100 trillion yuan, but now the balance of deposits is as high as 137 trillion yuan, which is equivalent to the total GDP of the mainland in a year.
In the past two years, the average is equivalent to more than 20,000 yuan per person in the bank, and the total savings of 137 trillion yuan, on average, is also a huge amount of 100,000 yuan per person.
That's polarization.
The real question is, are Chinese people really universally rich?
From the chart above, it is not difficult to find that the total amount of deposits in the past two years has already exceeded the level of the same period in the 2008 financial crisis, which shows that more people prefer to save as a precautionary saving rather than because of other factors.
However, the increase in deposits does not generally reflect the fact that mainland households are "rich."
According to CICC's data in 2019, there are only 400 million people in mainland China with a monthly income of more than 3,000, and another 1 billion people have a monthly income of less than 3,000, and only 70 million people have a monthly income of more than 5,000, and less than 10 million have a monthly income of tens of thousands.
Therefore, judging from the data alone, the deposits in the past two years have been 35 trillion, and the average person has saved more than 20,000, but from the income distribution data, more deposits are contributed by 10% or even less people, and the vast majority of people are probably still having zero savings in the bank.
As the macro economy comes under further pressure, the biggest question is probably how to get people to spend more rather than save more.
In the central bank's quarterly survey, 58 percent of urban savers preferred to save more in the first half of last year, much higher than the 24.5 percent who chose to spend more and the 17.5 percent who invested more.
Far Eastern Credit said in a report last year that the situation was the result of a combination of factors such as increased precautionary savings and poor circulation of household deposits and corporate deposits.
Only 17.5% of respondents chose to invest more, which also highlights the biggest problem of future economic growth, that is, how to find new growth points and tell the macro story of high-quality economic growth.
Industrial Securities believes that the super-trend growth of residents' deposits is more due to changes in their investment behavior, especially buying fewer houses. In the first 11 months of 2023, the cumulative sales of commercial housing in mainland China decreased by 1.33 trillion yuan year-on-year, and 5.63 trillion yuan less than the same period in 2021.
The downturn in real estate is also a major factor that has led to more people putting their money in the bank instead of buying a house.
Of course, what is behind this is that in the long run, more people lack confidence in the mainland's economic growth.
For example, in the financial market, due to the fact that there are fewer and fewer channels for investment and good investment objects, this leads to a small number of high-net-worth families not knowing where to invest their money, and the risk is too great, so it is better to put it in the bank.
In addition to this, the risks of banking and the stock market are also increasing, and there is less interest in these two investments.
Wind data shows that as of the first half of 2023, the balance of investment assets of mainland wealth management products will be about 27.7 trillion yuan, about 4.11 trillion yuan less than the same period of the previous year, and the number of newly established public funds in the first half of 2021 will only be 599 in the first half of 2023 after rushing to 1,046 in the second half of 2021.
In the past, the stock market was not good, but bank wealth management and real estate were still a good market, but now the stock market, bank wealth management and real estate are not performing well, which indirectly leads to a large amount of cash nowhere to go, which can only be converted into numbers on bank accounts.
This can also explain why the deflationary pressure was severe last year, because once the money is not in circulation, even if our M2 issuance rate has increased by double digits for 20 consecutive months, but because the money is not in circulation, the M2 issued has become savings, and the natural inflation cannot get up, and the downward pressure on deflation will be great.
The next question is logical, since there is no good investment target, and the bank interest rate is not high, why are people still reluctant to consume, and would rather put their money in the bank to eat dead interest than consume?
One of the reasons is that inflation is not high, or there is almost no inflationary pressure, which leads to the fact that money is not worthless, but more valuable, and this factor leads to people not having greater consumption pressure.
Secondly, due to the lack of good investment targets, since money cannot make money, it may be better to put it in the bank to eat dead interest.
Perhaps the most important points are risk, uncertainty and confidence.
If we want to stimulate consumption, of course, we can't just rely on words, what we need to create is an expected environment for consumption, how to understand this sentence?
In fact, it's very simple, we just need to look back at how we did it, when it was mentioned in the past when it was mentioned that consumption was upgraded to personalization?
In fact, it was the time of rapid economic growth in the mainland, the rapid economic growth during that period, and the real estate industry was also thriving, which gave consumers a great expectation, and the reason why a person dared to consume was nothing more than to imagine that his future income could grow significantly.
I thought the same thing three years ago.
At that time, my friend was looking for a job, because he couldn't find a better job, my friend wanted to enter the factory, and I also comforted my friend not to worry, and he could easily earn tens of thousands of dollars a month within ten years, what trend did I see at that time?
In fact, it is the optimism under the sustained and rapid economic growth.
If a person believes that his future income will grow substantially, he will be inclined to spend high today rather than not at all.
Conversely, today's sluggish consumption environment also reflects the fact that people's expectations for the future have begun to decrease.
This is a very red flag.
From the introduction of the market economy to the present, strictly speaking, we have never experienced the economic cycle, even the global financial crisis in 2008, in fact, we are still far from the center of the storm, the concept of the Chinese people has always stayed under the rapid economic growth, so now the economic growth is slowing down, a decades-old macro narrative has changed, and a large number of people have not adapted to it.
And that includes myself.
Why not? Because partly because they are becoming more and more pessimistic about their future income.
A 20-year-old undergraduate student told me that she only has weekends when classes are not full, and the rest of the time is almost all full, and even on weekends, there is still half a day of classes to attend.
Almost every day in the dormitory is studying, according to her words, it is the death of involution, asked about her plans after graduation, she almost blurted out, either graduate school, or public examination, I asked her why she didn't step into the social employment?
She looked at me in disbelief, as if I had said something remarkable.
She will also tell me very directly that her expectations for her future are not very high, and that after graduation, the monthly salary can be six or seven thousand is already very satisfied, and a graduate degree, the monthly salary of six or seven thousand is very satisfied, in fact, this kind of universal low expectation has posed a huge challenge to the consumption environment of the whole society.
Bai Yansong said that there are 400 million middle-income people on the mainland, and then asked a question: Why don't they consume?
I think the answer is self-explanatory, the first factor is because of the house, buying a house at the request of the mother-in-law is a must, which has emptied the wallets of several generations, and the mortgage owed has also overdrawn the great spending power.
If you don't have money to pay off your debts, how can you have spending power?
The second factor is that the income is generally low, the middle-income group is a monthly income of more than 3,000, and this is only 400 million people, and there are 1 billion people with a monthly income of less than 3,000, and the income is low, and they can only consume and downgrade, which is nothing to say.
The third factor is the low level of social security.
If we look at those developed economies in Europe and the United States, they generally don't like to save money, especially for young people, so why don't they like to save money? A big factor is that their social security system is very perfect, especially for low-income groups, they have food relief, and even housing assistance, and so on, which to a certain extent has also contributed to many people becoming "homeless."
After all, if you don't work or make money, you won't starve to death, so naturally some people are willing to be homeless.
This is the disadvantage of welfarism, but it must be more beneficial than disadvantageous, because the social security system can make people consume better and enjoy the joy and happiness brought by consumerism.
Every time I watch a short video, I see young people in Europe and the United States surfing and skydiving, and there are always many people in the comment area who envy them, after all, compared with us, the pressure on our young people is undoubtedly much greater.
Looking at the world, there are almost no young people in any economy who need to buy a car or house before the age of 30, even if it is a strong old developed economy such as the United States and Japan, the average house-price-to-income ratio is about 6 or 7 years, which means that it takes 7 years without food or drink to afford a house, and after graduating from college, they will be in their twenties.
This can not be done in developed economies with high income levels, and the mainland's house-price-to-income ratio is ridiculously high, and the first-tier cities in Beijing, Shanghai, Guangzhou and Shenzhen are almost all started in 30 or 40 years.
In the past, we said that young people dared to consume, and were willing to consume, and some even took out loans to consume, but today, with the changes in the macroeconomy, a cycle has come, and young people are overwhelmed by anxiety and pressure, which also makes it more difficult to stimulate consumption.
In the future, if we want people to consume more, it is nothing more than to solve the three mountains, improve the social security system, and increase incomes, and of course, the most important point is to reconstruct young people's optimistic expectations for the future, not pessimistic expectations.
But none of the above three points can be achieved overnight.
We need to let the bullets fly for a while, let the time run for a little longer, but the most important thing at the moment is actually the macroeconomic pressure, and how the long-term downturn and anxiety will affect the confidence of a generation in the future.
end.
Author: Luo sir, the workplace reference of the new youth. Concerned about the logic behind the development of things, optimistic pessimists. Follow me and grind the knowledge to you.