Households diversifying investments
Financial industry professionals expect China's household savings to continue shifting into equities, wealth management products, gold and insurance in 2026, as persistently low interest rates and a rebound in capital markets accelerate diversification in household asset allocation.
At the beginning of 2026, high-interest deposits and high-yield wealth management products that were previously used to stimulate the market have significantly decreased. Several large banks have experienced tight supply of long-term, large-denomination certificates of deposit, and their interest rate advantages have also diminished compared to the past.
Under a strict regulatory environment, traditional practices such as high-interest deposit solicitation and disguised interest subsidies have become more limited, analysts said.
Wang Ziyu, an analyst at China International Capital Corp, said that the average decline in deposit rates across maturities was about 30 basis points in 2025. At the same time, growth in household time deposits slowed markedly, while the expansion of demand deposits, wealth management products, non-money market funds and non-bank deposits accelerated.
By the end of the third quarter of 2025, the total size of wealth management products in China had reached 32.13 trillion yuan ($4.6 trillion), a 9.42 percent year-on-year increase, said a report released by China Wealth (Asset) Management Registry and Custody Co Ltd.
The stock market and the gold market also became more active, prompting many funds to shift toward higher-yielding assets.
The annual Central Economic Work Conference held in December proposed to promote stable economic growth and a reasonable recovery of prices, emphasizing employing various monetary policy tools such as reserve requirement ratios and interest rates in a flexible and efficient manner to maintain ample liquidity.
Zhang Di, chief macro analyst at China Galaxy Securities, said the central bank is likely to further cut interest rates this year, steering loan prime rates — market-based benchmark lending rates — lower and passing the impact through to both deposit and lending rates.
Looking ahead to 2026, CICC analysts estimate that about 32 trillion yuan of household time deposits with maturities of two years or longer will mature, an increase of 4 trillion yuan from a year earlier. As residents' willingness to save weakens and excess savings are gradually put to use, they believe that an additional 2-4 trillion yuan could flow into non-deposit investment channels this year.
"We believe conditions are in place for a modest uptick in Chinese households' risk appetite in 2026, with asset allocation showing a shift toward more demand-type deposits and greater use of asset management products," Wang said in a report on Wednesday. "However, a rapid improvement in risk appetite will still depend on the repair of household balance sheets, and may not be very pronounced at this stage."
Chinese individual investors conceptually are far away from their optimal efficient frontier, with property accounting for 54 percent of their asset base and cash 28 percent, compared with 11 percent in equities, said a Goldman Sachs report on Wednesday.
Falling real interest rates and higher expected returns on equities could drive cash to equities. Continuing disposable income and financial capital growth also implies that more than 14 trillion yuan of "new money" will look for a home to be deployed every year, the report said.
Goldman Sachs expects the MSCI China and CSI300 indexes to appreciate 20 percent and 12 percent in 2026,respectively, after key benchmarks gained 20-30 percent in the past year mainly on multiple expansion. The New York-based multinational investment bank and financial services company stays overweight for both A and H shares in Asia.
Speaking at a subforum of the Shenzhen International Finance Expo 2025 in November, Zheng Zifeng, chief investment officer for North Asia at Standard Chartered Bank, said China's macroeconomic data are gradually improving, with policy support maintaining its strength. Combined with a global easing cycle — under which major central banks outside Japan continue with a direction of interest rate cuts, keeping liquidity ample — these factors are expected to sustain the ongoing "deposit migration" trend, Zheng said.
Standard Chartered remains overweight on Chinese equities, anticipating that targeted policy stimulus and robust earnings growth linked to artificial intelligence themes will provide strong support for the Chinese economy.
jiangxueqing@chinadaily.com.cn




























