It is also the third time that the total saving deposits of both urban and rural residents surpassed 10 trillion yuan (US$1.25 trillion) in the last year.

In January 2005, the figure was 12 trillion yuan (US$1.5 trillion), and in May, that figure reached 13 trillion yuan (US$1.625 trillion).

According to PBOC statistics, bank account balances totaled 28.72 trillion yuan (US$3.59 trillion) as of December 2005, an increase of 18.95 percent from the year before.

The fourth quarterly survey conducted by PBOC in 2005 showed that 62.1 percent of account holders thought that interest rates were too low, representing an increase of 2 percentage points from the previous survey; 36.3 percent felt they were acceptable, a decrease of 1.4 percentage points.

Despite these sentiments, account deposits continue to rise.

One of the reasons why this might be is that financial burdens on the average Chinese continue to get heavier. Issues such as education, retirement and housing compel people to save.

Education is perhaps the most expensive consideration. A survey conducted in Changzhou, Jiangsu Province, found that a family has to spend an average 131,000 yuan (US$16,375) educating their child for 19 years, from primary school up to university, based on 2005 prices. This is 51,000 yuan (US$6,375) higher than 1999 estimates.

Escalating property prices also stretch the financial limits of the average person. An 80-square-meter house in the city of Hangzhou or Wenzhou, Zhejiang Province, is about 27.54 times the average annual income of the average local resident. The international standard for developing countries is about four or five times.

Further, up to 80 percent of residents do not have endowment insurance, and 85 percent do not have medical or health insurance.

Although total savings deposits are 14 trillion yuan (US$1.75 trillion), implying that each account holder has more than 10,000 yuan (US$1,250) in their account, the Gini Coefficient of disposable income stands at 0.447, higher than the international warning figure of 0.4. The Gini Coefficient is a measure of income inequality and fluctuates between zero and one, one being undesirable.

Experts believe that those with higher incomes should be able to invest more of their money through channels other than savings accounts. But there is currently a dearth of investment options.

Further, confidence in the stock market is relatively low. Dividends earned in the 11 years from 1993 to 2003 were the lowest at 23 percent in 1997, and the highest at a mere 56.5 percent in 2001. Moreover, as much as 65 percent of listed companies or enterprises paid no dividends to their investors.

(China.org.cn by Wang Ke, January 17, 2006)