Statistics from the People's Bank of China (PBOC) showed that 33.4 percent of respondents in 50 cities across the country preferred to put more money in banks, up 1.2 percent from last quarter.

A much smaller number of respondents, 7.9 percent, said buying stocks or funds were the best investment, down 2.7 percent from last quarter.

The findings suggest that people are less eager to invest in the risky stock market, which has had a lingering bearish mood, said sources with the PBOC.

Savings deposits grew to 11.4 trillion yuan (US$1.37 trillion) by the end of August, up 15.3 percent from the same period last year, but 0.6 percent lower from July.

Education remains the top reason for people to save money, followed by retirement, house decoration spending and spending for unexpected accidents.

The willingness to spend more rebounded slightly, with 32.3 percent of respondents preferring more spending, including deficit spending, 1.1 percent higher than last quarter.

"Although the percentage of people willing to spend more has been on the rise for the past two months, consumption desire plunged in the first quarter. The present level is still 0.6 percent lower than the same 2003 period," said the source.

The survey also showed that the number of people willing to spend money on housing in the next three months is shrinking, down1.2 percent from last quarter and 1.6 percent from the same period last year.

Nevertheless, the prospects of falling car prices is expected to boost car sales, as more respondents said they planned to buy a vehicle in the next three months, up 0.4 percent from last quarter and 1.1 percent from the same period last year.

The index indicating people's confidence in future income rose compared with last quarter and the same period in 2003, but the index showing their satisfaction with the present price level fell from last quarter.

(Xinhua News Agency September 16, 2004)