In late August, the People’s Bank of China conducted a survey on urban household savings in about 50 cities of various sizes. There were 20,000 valid responses. The following is the summary of the survey results:

1.  Current income of urban households grew steadily with confidence in their future income remaining strong.

The survey shows that, the current index of income sentiment of the urban households was 11.9, increasing by 0.1 from the previous quarter or 1.4 from a year earlier. Among the surveyed, 22.4 percent, accelerating by 0.7 percentage points compared with last quarter and increasing by 1.8 percentage points from a year earlier, considered their income increased.

According to the survey, the households’ future income confidence index was 17.4, a jump of 1.8 from the previous quarter or 1.4 from last year. Among those surveyed, 23.2 percent expected their income to increase and 5.8 percent expected a decrease. Generally speaking, residents remained confident in future income increase.

2． The households’ satisfaction over current price level decreased.

According to the survey, the households’ satisfaction index for current price level was -15.4, lower than that of the previous quarter. The number of those surveyed who considered the price level “rather high and not acceptable” increased by 2.7 percentage points from the previous quarter, and less people considered it “satisfactory”, down by 0.9 percentage points.

3.   The households’ willingness to consume continued to rise cautiously, but consumers were less enthusiastic in purchasing homes.

The survey shows the households’ willingness to consume continued to rise cautiously. At the present level of prices and interest rate, 32.3 percent of the surveyed considered consumption (including through borrowing) the “most sensible” choice, representing an increase of 1.1 percentage points from the previous quarter. The willingness to consume has grown continuously for two months, rebounded after the sharp fall of the index in the first quarter, it was still 0.6 percentage points lower on a year-on-year basis. The survey shows that households planning to buy large item consumer goods in the coming quarter reached 27.6 percent, down by 0.3 percentage points from the previous quarter or 0.4 percentage points on a year-on-year basis. 20.1 percent of the surveyed planned to purchase homes in the coming quarter, a decrease of 1.2 percentage points from the previous quarter or 1.6 from last year. And households planned to purchase cars in the next quarter was 10.5 percent, 0.4 percentage points higher compared with the previous quarter or 1.1 percentage points higher on a year-on-year basis.

4.         Influenced by the bearish stock market, the urban households’ enthusiasm for investment in stocks and mutual funds weakened while their willingness to save picked up. The purposes of saving remained stable.

The statistics show that, the outstanding deposits amounted to 11.4 trillion yuan at the end of August, increasing by 15.3 percent on a year-on-year basis, 0.6 and 4.7 percentage points lower than end-July and a year earlier respectively. The growth of RMB savings deposits fell for seven months in a row. However, according to the survey, the households’ willingness to save stopped decline. At the present level of prices and interest rate, 33.4 percent surveyed considered "to save more" the most sensible choice, representing an increase of 1.2 percentage points from last quarter, still a relatively low level in recent two years. The decreasing enthusiasm for investment in stocks and mutual funds constituted the main cause of the rebound in saving willingness. According to the survey, at the present level of prices and interest rate, 7.9 percent surveyed considered "to buy stocks or mutual funds" the most sensible choice, down by 2.7 percentage points from the previous quarter.

According to the survey on uses of households savings, “save for education” remained the first choice, “save for pension”, “save for purchasing homes and decoration” and “save for emergencies” etc. remained stable.