People are saving more and more money, is this a good thing or a bad thing?

　　People seem to be saving more than ever.

　　Central bank data show that in the first half of this year, RMB deposits increased by 18.82 trillion yuan, an increase of 4.77 trillion yuan over the same period last year. Among them, deposits from the household sector increased by 10.33 trillion yuan, compared with 7.45 trillion yuan in the same period last year. The year-on-year increase was as high as 38.7%.

Against the background of the recent increase in market liquidity and the significant reduction in the deposit interest rates of major banks, it is indeed somewhat unusual for household deposits to rise instead of falling, and the increase is so large.

　　The deep-seated reasons behind it are worthy of our careful appreciation.

Why are people saving money more and more?

　　In my opinion, the main reasons are as follows.

First, the willingness of residents to save on a precautionary basis has increased significantly.

　　As we all know, the Omicron variant has bloomed in many places in China since the beginning of this year. Due to the shortened incubation period and the rapid spread of the virus, the domestic epidemic has spread frequently in the first half of the year, and the difficulty of prevention and control has greatly increased.

Under the objective requirements of the general policy of "dynamic clearing", strong closure and control measures have been adopted in many places, which has hindered the flow of people and logistics, and many offline service consumption scenarios with travel and crowd-gathering attributes have been reduced.

　　At the same time, under the impact of the epidemic, many companies are unable to carry out business normally, the pressure on production and operation is increasing, and some companies are even facing the risk of layoffs and bankruptcy.

Superimposed on the long-tail effect of the current round of the epidemic and the uncertainty of the future, the income and jobs of many residents are no longer stable, and the sense of insecurity is increasing, especially those low- and middle-income groups who rely on wages as their main source of income have expectations for the future A more cautious attitude and increased risk aversion have led to a rise in precautionary savings.

　　In fact, the central bank conducted a round of questionnaires in the second quarter of this year, and the results showed that 58.3% of the residents were inclined to "save more", an increase of 3.6 percentage points from the previous quarter; 23.8% of the residents were inclined to "consume more" %, an increase of 0.1 percentage points from the previous quarter; while residents who tended to “invest more” accounted for only 17.9%, a decrease of 3.7 percentage points from the previous quarter.

These data can reflect the increase in residents' willingness to save for precautionary measures, and

Second, the capital market was hit hard.

　　Since the beginning of this year, affected by factors such as the Fed’s interest rate hike and the Russian-Ukrainian conflict, the global capital market has generally suffered a great impact. Many countries have experienced the double killing of stocks and bonds, investors’ risk appetite has declined, and risk aversion has risen.

As far as my country is concerned, the devaluation of the RMB in the first half of the year led to the return of foreign capital, and the large-scale rebound of the domestic epidemic caused the economic operation to be hindered, which increased the market's concerns about the prospects of economic growth. As a result, the volatility of the capital market increased and the stock market plummeted.

Among them, the Shanghai Composite Index fell from 3651 points at the beginning of the year to 2863 points at the end of April, and the ChiNext Index fell from 3349 points to 2122 points in the same period.

　　Not only that, but the increased volatility in capital markets has also triggered a chain reaction.

For example, many fund products have drawn back hugely and even suffered losses, which triggered a wave of redemptions, which in turn caused a drop in the stock market, and even bank wealth management products were "broken".

In this context, the wealth of the vast majority of ordinary investors has shrunk, and the willingness of funds to flow into the capital market is not strong.

In contrast, bank deposits are more secure and their returns are more stable, so more and more people choose to deposit money in banks, considering them as an excellent safe haven for funds, thus allowing them to deposit money. The amount keeps increasing.

In addition, the downturn in the real estate industry is another reason that cannot be ignored.

According to the relevant data of the "China Wealth Report 2022", nearly 70% of my country's residents' assets in 2021 will be physical assets, of which real estate will occupy an absolute dominant position.

However, since the beginning of this year, the real estate industry has continued to slump. In particular, some private housing companies have fallen into financing difficulties, and some areas have encountered problems in guaranteeing and handing over buildings, which has led to a significant decrease in residents' willingness to buy houses.

Many of them deposited the money originally intended for house purchases in the bank, which also pushed up residents' deposits to a certain extent.

Is it a good thing or a bad thing?

　　People are saving more than ever. Is that a good thing or a bad thing?

　　We can explain this from an economic point of view.

Let me tell you a little story first, The Fable of the Bee, written by the British classical economist Bernard Mandeville more than 300 years ago:

　　In a bee kingdom, at first all the bees wanted to pursue a luxurious life. In addition to their hard work and honey, they ate and drank all day long, splurged and wasted their lives. The life was very pleasant, and the whole kingdom became very prosperous.

However, as the days passed, they gradually realized that profligacy was not a good behavior, so they changed their attitude towards life and began to advocate frugality: they ate less and used less than before, and because they did not need to spend There are too many sales, and everyone is not working so hard.

As a result, the originally vigorous bee kingdom was increasingly withered, and its national strength gradually declined.

　　This point of view put forward by Mandeville is undoubtedly shocking, because in the eyes of the classical economists at that time, no matter from the economic or moral level, they should oppose extravagance and waste, and advocate thrift and abstinence, so as to increase the social welfare of the whole society. Savings, banks can also carry out more investment activities, which is conducive to stimulating economic growth.

Precisely because this idea occupied the mainstream in the early 18th century, "The Fable of the Bee" attracted various criticisms as soon as it came out, and Mandeville himself even suffered a lot of personal attacks.

　　However, with the development of economy and society and the passage of time, Mandeville's theory was gradually accepted by people.

By 1936, the pioneering work of modern macroeconomics, The General Theory of Employment, Interest, and Money, was published by the world-renowned economics guru John Maynard Keynes.

In the book, Keynes put forward a point of view:

　　This is the famous

, which can be said to be the inheritance and development of mandeville 's thought , and this theory has also profoundly affected the formulation of macro - control policies of various countries in the future

　　In fact, for any economy, the development orientation required at different stages of development is also different.

Specifically, in the period when the level of productivity is low and the economic foundation is relatively weak, the material of the whole society is relatively scarce, and the market supply is far from being able to meet the demand. At this time, it is indeed necessary to advocate frugality and encourage residents to save more, so as to realize the accumulation of funds. , and then expand the scale of investment and improve production capacity.

　　However, with the development and progress of the economy and society, the level of productivity has been greatly improved, and material wealth has become more and more abundant, and the phenomenon of oversupply has gradually appeared. The increase in income level has made residents have higher requirements for consumption. At this time It is necessary to promote the upgrading of the industry by promoting consumption and expanding demand, so that the supply and demand sides can achieve a new dynamic balance at a higher level. The pace of healthy and sustainable development.

　　Of course, promotion of consumption and extravagance and waste are not the same concept. Economic development needs the help of consumption, but it does not mean that excessive consumption or conspicuous consumption is advocated. Economic development and overall personal progress should never be disconnected or deviated from each other.

How to turn residential storage into consumption?

　　Having said that, in the first half of this year, the substantial increase in the deposits of my country's household sector is the other side of the downturn in consumption, which is that the fundamental role of consumption in economic development has not been fully exerted. Circulation" is unfavorable, so it should be paid more attention.

So, how can residents' savings be converted into consumption?

　　As mentioned above, since the main reason for the increase in household deposits is the increase in the willingness to save on precautionary measures, the key to solving the problem is when the precautionary saving can be weakened.

　　In order to explain the changes in precautionary savings, we may learn from the research ideas of Essence Securities, and take the performance of Beijing urban residents during the SARS period in 2003 as a reference.

As can be seen from the figure below, since 2002, the savings rate of urban residents in Beijing has generally been on an upward trend, but in the two most severe quarters of the SARS epidemic, the savings rate was significantly higher than the long-term trend level, reflecting that residents Precautionary savings are accumulated in response to risk and uncertainty.

Although "SARS" disappeared in late June of that year, the precautionary savings of Beijing residents did not get immediate relief, and it gradually returned to the long-term trend line after September. It was only after a quarter of a quarter that the savings rate of urban residents in Beijing showed a reverse compensatory decline.

　　If such a rhythm is followed, under the background of repeated and normalized prevention and control of the new crown epidemic, it may be difficult for residents' precautionary savings to decline in a short period of time.

In fact, from the recent trend of the consumer confidence index, it can be seen that the current consumer confidence of residents is obviously insufficient, and sub-indices such as employment, income, and willingness to consume have also declined significantly since the beginning of this year. Increase.

　　Because of the above, in order to truly turn residents’ savings into consumption, and then provide impetus for the development of the national economy, it is imperative to further strengthen and innovate the urban management mechanism, adopt more scientific and precise means of epidemic prevention and control, and balance epidemic prevention as much as possible. In order to stabilize people's expectations for the future and reduce insecurity.

　　At the same time, we also need to step up efforts to stabilize employment, so that Chinese people can have a stable source of income, and then boost consumer confidence. Considering that small, medium and micro enterprises are an important carrier for employment, we need to start from stabilizing small, medium and micro enterprises, through Tax cuts, fee reductions, subsidies, reduction of layoffs, and increased financial support are all measures to stabilize the operation of enterprises. It is necessary to focus on the employment of key groups, formulate relevant employment policies for vulnerable groups in the job market, and improve flexible employment. Policies and systems such as protection of labor rights and interests, premium payment, and remuneration will better open up new space for consumption and employment.

　　It is also worth noting that the impact of the epidemic on low- and middle-income people is greater than that of high-income people, because the main source of income for the former is wages, while the latter is mostly property income (see "Why People Don't Love Consumption?" ).

Moreover, due to the impact of various expenditures such as housing loans and car loans, there are many middle- and low-income people in a state of low or even zero savings.

Considering that the marginal propensity to consume of high-income groups is lower than that of low- and middle-income groups, and low- and middle-income groups account for the majority of the total population, in order to promote economic recovery by boosting consumption, it is necessary to focus on improving in the long run. The income level of low- and middle-income groups should be expanded as much as possible to form an “olive-shaped” olive-shaped distribution pattern.

　　Specifically, it is necessary to gradually increase the proportion of residents' income in the distribution of national income and the proportion of labor remuneration in the initial distribution as the focus of adjusting income distribution, and in the process of redistribution, through fiscal, taxation and other measures, adjust the relationship between various income subjects. income disparity and focus on equity.

In addition, we should continuously improve the social security system, further expand the coverage of social security, and intensify reforms in medical, health, education, housing, etc., to make the system more reasonable and standardized, and effectively reduce the worries of the majority of residents, so as to truly Let people dare to consume, willing to consume.

　　[Note: There are risks in the market, investment should be cautious]

(The author is Fu Yifu, a senior researcher at Xingtu Financial Research Institute)