China’s US$7 trillion cash pile is shifting into stocks, gold.
CHINESE households are scouring for higher-yielding investments as roughly US$7 trillion in time deposits come due this year, a shift that could provide additional fuel for the nation’s financial markets.
The mountain of savings is a legacy of a prolonged real estate crisis and years of lacklustre stock returns, which prompted millions to seek the safety of bank deposits. With rates now sliding towards 1 per cent, that capital is increasingly looking for a new home.
Investors are weighing a move into stocks, wealth management products or insurance, which would align with Beijing’s efforts to cultivate sustainable market gains to support the broader economy.
“I can’t wait to make some money from the capital market,” said Min Chen, a civil servant from Hangzhou who has two million yuan (S$369,387) in certificates of deposit maturing this month. She’s planning to shift the money into mutual funds as her job prevents her from buying stocks directly. Although the deposits yield 3.1 per cent, she regrets missing the recent stock rally and is betting more gains will follow.
About 50 trillion yuan in deposits with maturities of more than one-year will expire in 2026, an increase of 10 trillion yuan from last year, according to a December report by Huatai Securities analysts led by Zhang Jiqiang. Some 30 trillion yuan is held at large state-owned banks, with a greater share of the total maturing in the first half of the year, the analysts said.
The shift is already underway, with demand for participating insurance policies at some of the largest insurers exceptionally strong as investors seek steady returns in a low interest rate environment.
Encouraged by a strong comeback in stocks, which added over US$1 trillion in market value over the past month alone, some are also diving into equities. Chinese stocks have trended upward since April, showing off resilience during bouts of global tariff tensions as the country’s advances in AI continued to woo buyers. Gains have been more pronounced in technological stocks, with the Nasdaq-like Star 50 Index up more than 12 per cent in 2026.
Gold prices have also hit records, with Chinese investors among those piling in to fuel the rally.
It marks a turnaround from earlier years, when Chinese savers would trek hundreds of miles just to find the best bank deposit rates as stocks were slumping. Chinese banks have trimmed deposit rates seven times since 2021 to protect their margins, which were eroded as Beijing ordered them to make cheap loans to support the economy. Some smaller banks have pushed term deposit rates down to just over 1 per cent.
Source: Businesstimes