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Shuli Ren

Where Will the Chinese Splash Their Extra $827 Billion?

Investors are waiting to see if consumers engage in a spending frenzy, or keep their cash for a rainy day.

Pent up demand.

Pent up demand.

Photographer: Qilai Shen/Bloomberg

Forced to stay home because of the government’s Covid-Zero policy, Chinese consumers saved one-third of their income last year, depositing 17.8 trillion yuan ($2.6 trillion) into banks. That’s extreme, even for the famously thrifty nation. Before the pandemic, households put away roughly 17% of their earnings.

Now that Covid restrictions are behind them, will people come out to spend with vengeance, making up for the time wasted in lockdowns? Over the last three years, excess savings reached 5.6 trillion yuan ($827 billion), according to JPMorgan Chase & Co estimates.