Chinese bank deposits increased by CN¥26.3 trillion ($3.9 trillion) last year, according to recent data from China’s central bank, the People’s Bank of China (PBOC). Spurred by China’s rigid COVID-19 containment strategy, which the government rolled back in December, household savings surged by CN¥17.8 trillion in 2022, growing by more than CN¥5 trillion in the last two months of the year alone.
To many Western economists and analysts, these so called “excess savings” represent pent-up demand that could lead to a wave of “revenge spending” this year and drive the global economic recovery. But while China is expected to experience a recovery in consumption this year, Chinese households will likely maintain a higher level of precautionary savings over the long term.
To be sure, the increase in Chinese household savings last year is unusual and reflects consumers’ inability to spend as a result of China’s strict zero-COVID lockdowns, which fo
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