Core Insights - The significant increase in household deposits in China, amounting to 12.73 trillion yuan in the first three quarters of 2025, reflects a cautious outlook among residents due to slowing economic recovery and weakened corporate profitability [2][4] - Despite a stable Consumer Price Index (CPI) with a year-on-year decrease of 0.3%, the real purchasing power is diminishing due to excessive money supply, leading to hidden devaluation of currency [2][7] Group 1: Household Deposits and Economic Context - The total increase in RMB deposits reached 22.71 trillion yuan, with household deposits accounting for over half, averaging nearly 9,000 yuan per person [5] - The growth rate of M2 at 8.4% significantly outpaces the growth of disposable income, indicating that the expansion of money supply dilutes the value of currency [5][7] - The low interest rates on savings, with three-year fixed rates dropping below 2%, result in negligible or negative real returns for depositors [7] Group 2: Real Estate Market Trends - The real estate market has seen a reversal, with the average price of second-hand homes in Beijing dropping from 43,000 yuan per square meter at the beginning of the year to 41,800 yuan by November [9] - Nationwide, the average price of second-hand residential properties fell by 0.34% month-on-month and 3.21% year-on-year, indicating a significant decline in market activity [9] Group 3: Investment Landscape - Gold has lost its appeal as a safe-haven asset, with prices fluctuating and high transaction fees eroding potential profits for individual investors [11] - The stock market, while experiencing some gains, has become highly volatile, with many retail investors facing losses due to rapid price changes in various sectors [13] - The digital yuan, despite its growing adoption, does not provide additional value protection against inflation, serving primarily as a more convenient payment method [15][16] Group 4: Economic Resilience - The increase in household savings reflects a collective caution among families regarding future economic conditions, contributing to a soft landing for the Chinese economy [18] - This cautious behavior, while indicative of underlying economic challenges, prevents the situation from escalating into a systemic crisis, showcasing the resilience of the Chinese economy [18]

Report Industry Investment Rating No relevant content provided. Core Viewpoints - In September 2025, financial data was neutral, continuing the trend of "weak credit and rising M1 year-on-year". Affected by the base effect, the year-on-year growth rate of social financing is expected to decline. The "deposit relocation" process needs further verification, and the bond market is expected to be mainly volatile [6][30]. Summary by Directory 1. Financial Data Review - **Social Financing**: In September 2025, the year-on-year growth rate of social financing declined slightly to 8.68%. The government bond's driving effect on social financing weakened due to the misaligned issuance rhythm and high base from the previous year. Excluding government bonds, the year-on-year growth rate of social financing was 5.94% [4][10]. - **Money Supply**: M1 continued its high - growth trend, with a year-on-year growth rate of 7.2% in September, up 1.2 percentage points from the previous month. The year-on-year gap between M1 and M2 widened to -1.2%. The growth was driven by a low base last year and increased fiscal spending [5][17]. - **Credit**: The total credit was slightly weak and structurally differentiated. In September, new RMB loans were 129 billion yuan, slightly lower than expected. Corporate short - term loans expanded, while resident credit was weak. Resident short - term loans increased less year - on - year, and the personal consumption loan discount policy's effect was not fully shown. Resident long - term loans increased year - on - year due to housing policy optimization and the sales season. Overall, the credit data showed that policy guidance was effective in some areas, but enterprise long - term investment willingness and resident consumption credit recovery were still constraints [20][21]. - **Deposit**: In September, RMB deposit data showed structural differentiation. Resident deposits increased significantly, while non - banking financial institution deposits decreased. This was affected by seasonal factors and the high base from the previous year, and the "deposit relocation" trend needs further verification [27]. 2. Financial Data and Bond Market Outlook - The financial data in September was neutral, and the bond market is expected to improve slightly in the fourth quarter but remain a weak asset, mainly volatile. Investors should focus on four short - term disturbance factors: tariff trends, fund sales fee rate adjustments, inflation trends, and equity market performance [30].

Core Viewpoint - The significant decrease in household deposits in July indicates a potential shift of funds from savings to other investment avenues, possibly driven by declining interest rates and a desire for better returns [1][4][5] Group 1: Deposit Trends - In July, household deposits in RMB decreased by 1.1 trillion yuan, which is 780 billion yuan more than the same period last year [1] - Non-bank deposits increased by 2.14 trillion yuan, showing a year-on-year increase of 1.39 trillion yuan [1] Group 2: Investment Behavior - The reaction to the news suggests that many believe the stock market's rebound has motivated residents to move their funds into equities, contributing to the market's upward momentum [3] - There is uncertainty regarding how much of the "moved" deposits have actually entered the stock market versus other investment forms [3] Group 3: Economic Implications - The continuous decline in interest rates has led to a lack of trust in savings, prompting residents to seek ways to preserve and grow their wealth [4] - The management's intention appears to be encouraging residents to shift savings into consumption and other economically stimulating areas rather than keeping them in low-interest bank accounts [5] Group 4: Challenges and Concerns - There is a significant gap between the management's hopes for increased consumption and the residents' willingness to invest, as many face financial pressures such as housing loans and rising living costs [5][9] - The forced reduction of insurance product returns alongside lower savings rates may push residents to seek investment opportunities abroad, complicating the domestic financial landscape [5][7] Group 5: Market Stability - For the stock market to be a viable option for residents, it must be stable and not subject to extreme fluctuations that could deter investment [9] - The focus should be on ensuring that investors, particularly retail investors, can profit from the market, which would encourage a more favorable environment for the movement of household deposits [9]

Core Viewpoint - The significant increase in non-bank deposits in July reflects a trend of residents shifting their savings towards financial products, influenced by the recent bullish stock market and declining interest rates [1][2][5]. Group 1: Non-Bank Deposits - In July, non-bank deposits increased by 2.14 trillion yuan, a year-on-year increase of 1.39 trillion yuan, while household deposits decreased by 1.1 trillion yuan, a year-on-year decrease of nearly 0.8 trillion yuan [2]. - From January to July, non-bank deposits cumulatively increased by 4.69 trillion yuan, which is 1.73 trillion yuan more than the same period last year [2]. - Analysts suggest that the increase in non-bank deposits is driven by the end of the mid-year bank assessment period and the recent rise in the stock market, leading to a large-scale return of household savings to financial products [2][5]. Group 2: Money Supply and Liquidity - The growth rate of M2 (broad money) in July increased by 0.5 percentage points to 8.8%, exceeding market expectations of 8.3%, while M1 (narrow money) growth rate rose to 5.6%, marking a significant rebound over three consecutive months [2]. - The narrowing of the M1-M2 spread to -3.2% indicates enhanced liquidity, suggesting that households and businesses are converting time deposits into demand deposits for consumption or investment [3]. Group 3: Capital Market Expectations - There is a strong market expectation that capital markets will become a significant outlet for household deposits, with historical trends showing that each bull market is accompanied by a migration of bank deposits to capital markets [4][5]. - The estimated maturity of fixed-term deposits is substantial, with approximately 105 trillion yuan maturing by 2025 and 66 trillion yuan thereafter, which could lead to significant liquidity impacts if these funds flow into asset markets [4]. Group 4: Monetary Policy Outlook - Despite recent market optimism, July's financial data indicates slow recovery in demand, with new credit showing a negative growth for the first time in 20 years, highlighting the core contradiction in the current economic environment [7]. - The implementation of fiscal subsidy policies is expected to reduce the need for aggressive monetary easing, with analysts suggesting that the probability of interest rate cuts may decrease due to the effectiveness of targeted fiscal measures [8].

Monetary Supply - The broad money supply (M2) increased by 1.1% to 82.48 billion MOP, driven by a 3.2% rise in M1 due to a 4.5% increase in demand deposits, despite a 0.2% decrease in currency in circulation [2] - The composition of M2 by currency shows that the shares of MOP, HKD, RMB, and USD are 32.1%, 46.4%, 6.7%, and 12.8% respectively [2] Deposits - Total deposits in the banking system rose by 2.6% to 139.73 billion MOP, with resident deposits increasing by 1.1% to 80.38 billion MOP and non-resident deposits up by 6.5% to 37.39 billion MOP [3] - The public sector's deposits in the banking system increased by 1.6% to 21.97 billion MOP, with the currency composition being 18.8% MOP, 46.7% HKD, 8.3% RMB, and 24.4% USD [3] Loans - Local private sector loans increased by 2.8% to 51.26 billion MOP, with significant quarterly increases in loans to the "Food and Beverage and Hotel" sector (34.3%) and "Water, Electricity, and Gas Production and Supply" sector (18.6%) [4] - Total loans in the banking system rose by 4.2% to 103.52 billion MOP, with the currency composition being 21.4% MOP, 44.1% HKD, 11.2% RMB, and 20.0% USD [4] Operating Ratios - The loan-to-deposit ratio for local residents increased from 49.3% at the end of May to 50.1% at the end of June 2025, while the overall loan-to-deposit ratio, including non-residents, rose from 73.0% to 74.1% [5] - The non-performing loan ratio decreased to 5.4% [5]