The myth of income， spending and financial asset growth

Economic Growth and Household Financial Assets - Household financial assets increased by 9.5% year-over-year (YoY) in Q1 2024, with a year-to-date (YTD) growth of 5.1%[11] - Disposable income per capita rose by 6.2% YoY in Q1 2024, recovering from the lowest level in 2022[11] - Household deposit growth moderated to approximately 11% in April and May 2024, down from 12% YoY in Q1 2024[6][11] Consumption Trends - Consumption payment growth for lower-ticket-size items has been significantly higher, with overall consumption payment growth remaining at 5-6% compound annual growth rate (CAGR) over the past three years[23] - Bank card consumption payment value increased by 7.6% YoY in Q4 2023, indicating stable consumption growth despite downgrades in first-tier cities[40] - A notable shift in job applications from internet and financial sectors to manufacturing and industrial sectors has been observed, reflecting changing employment trends[20] Financial Product Preferences - The proportion of insurance assets in household financial assets increased to 10% in Q1 2024, with insurance products growing by 9.7% YTD[12][42] - Wealth Management Products (WMP) assets under management (AUM) exceeded RMB 28 trillion in April 2024, indicating a recovery in this segment[44] Market Concerns - Structural changes in income allocation and increased competition among goods and service providers may negatively impact corporate margins[41] - The shift in consumption from goods to services could pose challenges for corporate profitability and producer price index (PPI) stability[41]