On December 18, the Central Economic Work Conference proposed: On December 22, the China Securities Regulatory Commission emphasized: The biggest highlight of the above two paragraphs is the mention of "savings."

In particular, the China Securities Regulatory Commission clearly emphasizes "promoting the transformation of residents' savings into investment." In my observation, this is extremely rare.

The current characteristic of my country's investment market is that residents invest a relatively high proportion of risk-free assets, such as bank deposits, bank capital-guaranteed financial management, etc.

But the proportion of risky financial assets is relatively low, such as stocks, funds, etc.

According to the "2019 China Urban Household Assets and Liabilities Survey" by the Central Bank: Other public data show: The reasons why our residents have a higher holding rate of risk-free assets such as bank deposits: 1. We are a developing country with relatively developed interest rates.

The country is much higher.

For example, in October 2008, the domestic one-year deposit interest rate was as high as 4.14%.

The deposit interest rate is the income earned from residents' savings. The higher the interest rate, the easier it is to absorb deposits.

2. Residents’ medical, elderly care and education needs.

When the social security system is not yet complete, keeping a deposit will give you peace of mind.

3. The stock market is not strong, with sharp rises and falls, and individual investors have a high loss rate.

4. Weak financial awareness and low popularity of financial knowledge.

I always think that money in the bank will make money, and I will definitely make money without losing money.

The impact of a high resident savings rate is that it is easy to increase the overall debt ratio of the society. When we deposit money in the bank, it is equivalent to lending money to the bank, and the bank then takes our money for loans, which is equivalent to the bank lending to enterprises or individuals, two-tier borrowing.

Increased the debt ratio of financial institutions and society.

Another is that high savings rates will bring certain restraints to consumption.

For a country, a high savings rate is good, but an excessively high savings rate will make everyone form the habit of "only saving money, not spending it".

The China Securities Regulatory Commission proposed to "strengthen the construction of the investment side of the capital market and enhance the wealth management function", mentioning the role of the capital market in wealth management.

what does that mean?

This means that A-shares need to build an investment market, not a speculative market.

To enhance the wealth management function, I believe that the first thing to do is to make A-shares profitable and not to rise or fall sharply. Last month it was a bull market, but this month it has become a bear market.

If A shares are to have a money-making effect, they must have incremental funds, especially stable incremental funds (institutional funds).

Some things seem to be already being done.

For example, at the institutional level, pension funds enter the market, insurance funds enter the market, and bank wealth management subsidiaries can open stock accounts, etc.

At the resident level, deposit interest rates continue to fall. For example, in 2008, the one-year deposit interest rate reached 4.14%, but now it is only 1.5%.

Lower deposit interest rates will cause residents' funds to overflow from their savings deposits.

However, only a small part of the overflow funds may flow into the stock market, and more will go to monetary funds and the property market.

In the past three years, with the strengthening of supervision, the yield of money funds has been declining, and sometimes it is even lower than that of bank deposits.

The impact is that the flow of residents' funds into monetary funds has slowed down significantly, and the role of monetary funds in diversion of savings funds has been reduced. Of course, monetary funds can also be regarded as a kind of "special savings."

But what needs special attention is real estate. Although there are restrictions on purchases, loans, and sales, it is difficult for real estate speculation funds to enter.

But as long as housing prices continue to rise, buying a house will easily be regarded as a "guaranteed profit" investment, and funds will enter the property market through various means.

Therefore, if we want to “promote the transformation of residents’ savings into investment”, the most critical thing is to control the speed of rising housing prices and let the property market gradually cool down.

The reason why residents are keen on saving but not keen on consumption is closely related to the rise in housing prices.