In the second half of August 2008, the PBC conducted a survey on urban depositors in 50 large, medium and small-sized cities across the country. 20,000 valid responses were received. The survey findings are as follows:
1.Both the current income satisfaction index and the future income confidence index declined. Confidence in future income rise was low.
According to the survey, urban residents satisfaction index for current income registered 15.3%, down 2 percentage points quarter on quarter and 5.7 percentage points year on year. The future income confidence index stood at 19.3%, 1 and 4.5 percentage points lower than the previous quarter and the same period last year respectively. Both indexes fell to the lowest level since 2006.
As the survey showed, 24.8% of respondents reported that their income increased in the surveyed period, down 1 percentage point quarter on quarter and 3.8 percentage points year on year. 10.6% of respondents considered their income in the next quarter hard to predict , rising 1.1 and 0.4 percentage points from the previous quarter and the same period last year respectively. 24.5% of respondents expected their income to rise in the next quarter. This percentage fell three quarters in a row, with an accumulated decline of 4.9 percentage points, a sign that confidence in future income rise was sliding.
2.Residents acceptance of current prices improved gradually. Future prices were expected to fall.
According to the survey, after falling 4.2 percentage points in the previous quarter, the share of respondents who considered the price too high to be accepted continued to shrink, down 4.5 percentage points this quarter. By contrast, respondents who reported that the price was high but still acceptable took up 4.2 percentage points more, having gained 4.1 percentage points last quarter. This showed that residents acceptance of current prices was improving.
Judging from price expectation for the next quarter, inflation expectation showed signs of subsiding. Respondents who expected the price to rise , while still accounting for a large share of 42.8%, decreased as much as 7.8 percentage points quarter on quarter and, more impressively, 18.6 percentage points year on year, representing the lowest in recent two years.
3.The stock market continued to be slack. Investment preference dropped and bank deposit continued to be residents top choice.
According to the survey, at the current price and interest rate level, 8.2% of respondents viewed more investment in stocks and funds as most desirable, a straight fall of 8.6 percentage points from the previous quarter. This proportion, hitting a record high of 44.3% in the third quarter of 2007, had fallen for four consecutive quarters, with each fall exceeding 8 percentage points. As the stock market carried on the steep downward trend, savings deposits, being risk-free and stable, continued to win favour. As the survey revealed, since the second quarter of 2007, the share of respondents who considered deposit rates proper had kept expanding, setting a new record high of 55.3% in this quarter. Bank deposit continued to be the top choice of residents. According to this quarter s survey, 43.8% of respondents found more savings deposits most desirable at the current price and interest rate level, hitting historical high, up 5.7 and 18.5 percentage points from the previous quarter and the same period last year respectively. 63.2% of respondents gave most weight to savings deposits in their household s financial assets, having risen for four consecutive quarters since the third quarter of 2007, with an accumulated increase of 12.8 percentage points.
4.Home purchase sentiment was prudent.
As the survey showed, 13.3% of respondents planned to buy homes in the next three months, the lowest level since the survey was first conducted in 1999, down 1.8 and 2.8 percentage points from last quarter and the same period last year respectively.
In the seven large cities surveyed, less than 10% of respondents in major cities like Beijing, Shanghai, Tianjin and Guangzhou had home purchase plans for the next three months, below the nationwide average.
attachment:
1. BankersAwarenessofEconomicDownsideRisksHeightenedandBankingBusinessIndexRebounded.pdf
