Why are Chinese savers moving money out of banks and into tech stocks?
Some commercial lenders have stopped offering long-term deposit products with higher interest rates
Prompted by lower interest rates on long-term bank deposits, Gong Jie, who works for an export firm in Shanghai, recently decided to invest half her savings in technology-focused mutual funds.
Three-year time deposits at ICBC, China’s largest lender, now pay 1.55 per cent interest a year in Shanghai, down from nearly 3 per cent in 2023.
Gong said she withdrew the money from her ICBC deposit account and put it into two mutual funds focused on chips and co-packaged optics (CPOs), two of the A-share market’s hottest sectors.
CPO technology places optical devices inside the same chip package as semiconductors – creating what are known as application-specific integrated circuits. Putting the devices closer together slashes power consumption, increases bandwidth density and reduces latency.