As the pandemic enters its 3rd year, more Chinese people say they’d rather save than spend

Finance

While mainland China faced its worst wave of Covid-19 since the initial shock of the pandemic, a central bank survey found more Chinese wanted to save money than spend or invest it.
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BEIJING — Chinese consumers are becoming more cautious than they were near the start of the pandemic, according to a survey by the People’s Bank of China released Wednesday.

Instead of spending or investing their money, more Chinese people wanted to save in the first three months of 2022, findings from the quarterly survey showed.

Survey respondents who said they were more inclined to save in the first quarter rose to 54.7% — the most on record since the third quarter of 2002, according to data accessed through Wind Information.

In the last few weeks, the spread of the highly transmissible omicron variant in major economic areas like Shenzhen and Shanghai have disrupted business and daily life with lockdowns and quarantines.

As Covid-19 enters its third year, there are signs Chinese authorities are shifting their narrative away from maintaining such a stringent zero-Covid policy to “a more pragmatic approach,” Carlos Casanova, senior Asia economist at UBP, said Thursday on CNBC’s “Capital Connection.”

But he doesn’t expect those changes will take place until the second half of the year, Casanova said. His firm is cutting its second-quarter China GDP forecast, he said, without specifying a figure.

Although the central bank survey found that the share of respondents who wanted to spend money in the first quarter fell to 23.7%, that level was only the lowest in a year, data accessed through Wind showed. An even lower 22% had expressed interest in spending during the worst of the pandemic in the first quarter of 2020.

Education was the top category in which Chinese consumers planned to increase their spending over the next three months. The PBOC survey found that 28.9% expressed such an intent — up from 27.2% in the fourth quarter last year.

And despite the struggles of China’s real estate industry, the share of respondents planning to buy a house remained the same for both quarters, at 17.9%, the survey said.

Fewer interested in buying stocks

While planning to cut down on spending, Chinese consumers said they were not inclined to invest their money either.

The share of respondents wanting to invest fell to 21.6%, the lowest on record going back to the first quarter of 2009, according to Wind.

Appetite for stock investing was the lowest among the three investment categories listed, and the share of respondents wanting to buy stocks falling to 16.2% in the first quarter — down from 17.3% in the previous quarter, survey data showed.

The PBOC said its quarterly survey, conducted since 1999, covered 20,000 people with bank deposits across 50 large-, medium- and small-sized cities in the country.

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