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Individual banking deposits in China had topped 10 trillion yuan (some US$1.2 trillion) by the end of February, the Beijing Morning News reported Thursday.
The figure, released by the People's Bank of China, was almost equivalent to the country's gross domestic product in 2002, said Professor Zhao Xijun, of the People's University of China.
While reflecting increasing incomes and living standards, the huge deposits also revealed problems with China's economic development, said Zhao.
First of all, he pointed out, there was a shortage of products to meet consumers' current consumption levels, which discouraged spending.
Secondly, there was a lack of satisfactory investment opportunities, which lead people to keep their money in banks.
Thirdly, if bank deposits rose too high, they would concentrate risks on the banking industry and increase its operational ventures.
Zhao further pointed out that savers also had their motives: they were preparing for the future due to the country's underdeveloped social security system; and they believed from present signs of deflation that their money would not depreciate in the banks.
He suggested that domestic demands should be expanded through fiscal policies and the social security system be further developed.
(Xinhua News Agency March 14, 2003)
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