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Savings deposits and currency structure change _ diversion of papers from China Download The study by National Economic Research Institute Beijing China Economic Restructuring Foundation funding,Versace Handbags, many of the points in and Fan Gang, Yu Yongding, rice and other professors in the formation of nation-building, in the course of the study also received Sun Tao, Luo Zhenyu, Li Shaoguang, Dr. Yuan equal some great help. read the article-www.kanwenzhang.com Abstract: Since recent times, the central bank cut interest rates continuously, leading to diversion of household savings deposits faster, but the shunt out funds are not as expected as the actual products into the market, thus stimulating consumption and investment demand, but a lot of the stock market, and the main pool in the primary market, the resulting huge amount of money precipitated the formation of broad money directly to the main contract. This not only caused further declines in aggregate demand, but also greatly reduces the financial efficiency of the entire economic system. Therefore, the state should take timely measures, reform of new shares through the distribution system, market debt and interest rates, etc., lead deposits funds into the actual production, improve the conversion efficiency savings to investment. 1, changes in household savings in China state reform and opening up, China's savings deposits of residents to maintain a high growth rate, and its development process can be divided into three stages: (1) growth phase :1978-1988, an average annual savings deposits of urban and rural residents increased by 30% or more, the balance of savings deposits of residents in 1988 reached 379.8 billion yuan for 1978, 21 billion yuan of 18 times. (2) rapid growth phase: the base has a larger case 1989 through-1996, the household savings deposits continued to maintain strong growth momentum, the balance of savings deposits of this period an average annual growth rate of 31.6%, to 1996, the savings balance rose to 3.852 trillion yuan. (3) The deceleration phase of growth :1996-1999, household savings deposits continued to grow despite the end of 1998 reached 5.3 trillion yuan, but this time, the growth rate of savings deposits started to decline, annual growth rate of 41.5% in 1994, all the way down to 15.4% in 1998. Meanwhile, the growth rate of new deposits began to appear negative, in which growth for 1997 was -12.4%, -8.2% in 1998. entered in 1999,Versace Handbags, household savings deposits to new changes in the situation. Savings deposits of urban and rural residents to 12 at the end of the 5.9621 trillion yuan, up 11.6% growth rate was only increased by the end of last year, down 3.8 percentage points from June to September was only 39.6 billion yuan savings deposits added, less than the same period last year by 148.5 billion yuan. In particular, in June, October and November, the month added a negative savings deposits, savings deposits amounts were as high as 2.5 billion, 94 billion and 8.4 billion. Above show that the diversion of household savings deposits in the further acceleration of investment, consumption, financial structure and other aspects of the resulting series of changes, analysis of savings and capital flows, currency asset structure and its economic effects of macroeconomic policies is important research and development . 2, the main reason for diversion savings In fact, the decline in household savings in China since 1994 began. Was to prevent the economy from overheating, the state adopted a policy of austerity. Household savings deposits, savings deposits, and then add three indicators per capita savings rate of growth peaked in 1994, after a declining trend emerged (see Table 1). Changes in savings deposits of residents of factors, such as real income, nominal interest rate, inflation rate, expected stability of the state of capital market development, a period of time, while the role of these factors make savings deposits continued to increase, while at the same time , people tend to ignore the growth of savings deposits, and the acceleration of the observation and analysis of trends in diversion of household savings deposits less attention. This trend continued into the second half of 1999, savings deposits began to negative growth, the reasons behind the need for its careful analysis. (1) interest rates continued to drop since 1997, to stimulate the economy, central banks cut interest rates for 7 times. Flexibility from a single-factor perspective, people's savings deposits on interest rates should be very sensitive, a significant reduction in interest rates on deposits, savings deposits of the financial assets means that the yield decreased significantly. According to portfolio theory, the residents, driven by maximizing the return on assets will gradually reduce the deposit holdings, while the corresponding increase in the number of other assets held, however, expected as deflation and the presence of unstable factors, such changes may be not obvious at first. In addition, even more developed in the asset market economy, changes in population structure of assets is also often requires a longer period of adjustment, so the short-term effects of changes in interest rates usually reflect changes in the savings on acceleration. However, continuous and substantial cut in interest rates will continue to weaken the role of other factors, the practical effect of savings deposits will gradually be reflected. (b) the levy of interest tax National People's Congress in August 1999 adopted a decision to amend personal income tax law, for the restoration of paving the way for interest tax. Tax levy of interest for depositors, the equivalent of the eighth cut. Such as the one-year deposit rate is now 2.25%, 20% levy interest tax, real interest rates dropped to 1.8%. In a sense, the collection of tax on interest rate cut may be greater than the economic effects. Cut to the people the impression that the bank received from the \The new money goes. August-October 1999, Shanghai and Shenzhen is about 40 times the average price-earnings ratio, which is after the seventh year deposit interest rate cut to 2.5% return on investment equivalent level. But the introduction of after-tax interest rate, 1.8% by year deposit interest rate calculations, Shanghai and Shenzhen, the average price-earnings ratio can be increased to 55 times, which for the stock market opened up space. Equity investment returns higher than the deposit interest income, plus income from stock transfer is still suspended the tax money will appear to move very natural phenomenon. [b] [1] [2] [3] Next