"Wall Street Journal": Why do Chinese people prefer deposits when interest rates are lower?

"Wall Street Journal": Why do Chinese people prefer deposits when interest rates are lower? The title of the article on the website of the Wall Street Journal in the United States on September 24: The worse the banks treat the Chinese...

"Wall Street Journal": Why do Chinese people love to deposit more when interest rates are lower? The title of the article on the US "Wall Street Journal" website on September 24: The worse banks treat Chinese people, the more money Chinese people save. Over the years, there have been many explanations for why Chinese people save so much money. Here's a new explanation: An International Monetary Fund (IMF) study notes that the worse Chinese banks treat their customers, the more money Chinese customers save. Since the mid-1990s, the savings rate of Chinese urban households has risen from 19% of disposable income to 30%. During this period, China's per capita income increased fivefold. It makes sense that the richer people get, the less they save. But in China, the situation is exactly the opposite. Some economists believe that Chinese people save money to cope with the poor pension and medical system, because they know that they will spend a lot of money if they get sick. Others think Chinese people want to buy houses. IMF economist Malhar Barr puts it differently. He said Chinese people have a savings target in mind so that they can afford to buy a house and appliances, afford medical treatment and other things. They will do whatever it takes to achieve this goal. So when banks pay less interest after adjusting for inflation, they save more. And when banks give more interest, they will save less because they can easily reach their goals even if they save less. Since 1996, the interest rate level of the Bank of China has been getting worse and worse, which means that the gap between interest rates and the inflation rate is getting wider and wider. Therefore, Chinese people are saving more and more money. Therefore, the worse a bank treats its customers, the more customers save more and more money. "Continued increases in bank savings rates and a wider range of other investment options will help households reach their desired savings goals," Nabar wrote. In other words, if banks treat customers better, they will save less.