Unleashed Bank Deposits Misused In Chinese Economy

(MENAFN- Asia Times) Chinese bank deposits in the trillions of renminbi were vitalized to leave the banking system last month but the money has not yet been well-used in the real economy.

Chinese banks lost deposits totaling 3.92 trillion yuan (US$542 billion) in the single month of April 2024 after they were ordered by regulators to stop their long-term practice of offering extra interest to depositors.

New renminbi deposits plummeted 51% to 7.32 trillion yuan in the first four months of 2024 from 14.93 trillion yuan in the same period of last year, the People's Bank of China (PBoC) said on May 11.

At the same time, new renminbi loans fell by 10% to 10.19 trillion yuan from 11.32 trillion yuan for the same period.

Some research reports commented on those worse-than-expected figures but they were removed from social media.

Bloomberg reported that at least seven research reports from Chinese securities firms that had been posted to WeChat by analysts were unavailable for viewing on Monday. It said the social media platform received complaints about unspecified violations of rules governing public accounts.

The report said the incident highlighted the increasing difficulty of getting reliable economic information in China.

Where's the money?

According to the PBoC's benchmark, mainland Chinese banks can offer interest no higher than 1.45% on one-year deposits.


Asia Times

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