Nearly 4 trillion decreases in a single month, where did the deposit go?

静观Finance

2024-05-13 14:53Published in Hebei Finance and Economics columnist

Chinese have always been known for their penchant for saving money. But in April, we were surprised to find that Chinese may not like to save money.

According to media reports, recently, the central bank released a report on financial statistics for April. According to the data, the mainland's RMB deposits increased by 7.32 trillion yuan in the first four months, a decrease of 3.92 trillion yuan from 11.24 trillion yuan in the first quarter. In other words, monthly deposits decreased by nearly 4 trillion yuan in April.

So, where do the deposits go?

Let's take a look at where the "deposits" have gone, based on the latest data and analysis released by the central bank.

Of course, the "deposit" here refers to the part of the money that could have gone into the bank to be saved.

First of all, we need to realize that deposits and loans are the two-wheel drive of the economic cycle.

According to the "Report on the Implementation of China's Monetary Policy for the First Quarter of 2024" released by the central bank, the mainland's money supply is divided into three levels: M0, M1 and M2, of which M2 includes cash, unit demand deposits, unit time deposits and resident deposits. As an important part of the money supply, the flow of deposits has a direct bearing on the vitality and healthy development of the economy.

1. Loan flow: the supply side of enterprises and the real economy.

As an important channel for capital flow, loans are mainly invested in enterprises and the supply side of the real economy. As of the end of March, loans to enterprises and institutions and loans to households reached 163 trillion yuan and 81 trillion yuan respectively, with corporate loans accounting for 66% of the total loans, showing the dominant position of enterprises in the loan market. These loans are mainly used to support enterprises to expand investment and production, and residents to buy houses and consume, of which heavy asset industries such as infrastructure, real estate, and manufacturing account for about half of all loans.

2. Deposit distribution: It is the precipitation of the resident sector.

From the point of view of deposits, the resident sector is the main place where deposits are kept. At the end of March 2024, residents, enterprises, and governments accounted for 49%, 27%, and 14% of the total deposits of about 296 trillion yuan, respectively. This data reflects that in the process of economic cycle recovery, part of the funds have been deposited in the residential sector, which has not yet been converted into corporate deposits through consumption and other channels.

Second, we need to focus on multiple factors in the flow of deposits.

The flow of deposits is affected by a variety of factors, including the demand of economic agents, market environment, policy orientation, etc.

1. The demand of economic agents.

The investment and consumption behavior of enterprises and residents directly affects the flow of deposits. Under the current economic situation, due to the lack of effective consumer demand, the supply side of the real economy and the investment sector have received more financing, while the demand side, especially consumption, still has great growth potential.

2. Changes in the market environment.

Changes in the market environment, such as the adjustment of deposit interest rates and changes in the income of wealth management products, will also affect the flow of deposits. According to common sense, if the deposit interest rate falls and the yield of wealth management products rises, part of the deposit funds may flow to the wealth management market. However, due to the immaturity of the wealth management market, there may be other directions. The stock market may be another option.

3. The influence of policy orientation.

Through the adjustment of monetary policy, the central bank can appropriately guide the flow of funds. In the context of economic transformation and upgrading, the optimization and upgrading of credit structure has become an important goal of the policy.

Changes in the real estate market situation will also affect the direction of some funds. For example, prepayment.

4. The impact of income. If there is a fluctuation in the income of residents, then there will also be a fluctuation in the deposits. This is also a very important factor.

Third, the impact of deposit flows on the economy.

The flow of deposits has a significant impact on economic development. A reasonable flow of funds can promote the balanced development of the economy, while an irrational flow of funds may lead to an imbalance in the economic structure.

1. Promote the development of the real economy.

Loans flow to businesses and the supply side of the real economy, helping to expand investment and production and boost economic growth.

2. Affect consumer demand.

The accumulation of deposits in the residential sector may affect the release of consumer demand. In the context of residents' consumption to be recovered, how to stimulate consumption potential has become the key.

3. Capital circulation efficiency.

The circular efficiency of capital has a direct impact on the vitality of the economy. The intensification of the trend of regularization of deposits may lead to a decrease in the "live money" in the economic cycle, which will affect the efficiency of capital turnover.

As for the characteristics and existing problems of the current flow of funds that have not entered the bank, this part of the funds may have the following impacts.

1. Optimize the credit structure.

We will continue to guide funds to invest in key areas and weak links in the real economy, optimize the credit structure, and improve the efficiency of the use of funds.

2. Stimulate consumption potential.

Through measures such as tax and fee reductions and increasing residents' income, we will stimulate residents' consumption potential and promote the release of consumer demand.

3. Promote the circulation of funds.

By reforming the financial system, we can improve the efficiency of capital circulation and reduce the excessive precipitation of funds in a certain link.

4. Prevent financial risks.

Pay close attention to the dynamics of the financial market, guard against financial risks, and ensure the stability of the financial market.

The flow of deposits is an important part of the economic cycle, and there is a wealth of economic information behind it. In the future, with the continuous optimization of the economic structure and the deepening reform of the financial market, the flow of deposits will be more diversified and rationalized.

Where do the deposits go? Simply put, go where it's supposed to be!

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