China is on an epic monetary easing campaign.

Interest rates on loans and deposits have nearly halved over 10 years.

$1 million today in the bank earns $26,000 less that it did a decade ago.

$21 trillion in household savings earning $558 billion less due to falling rates.

There’s never been less incentive to keep money in the bank as today.

Over the same period, the Reserve Requirement Ratio (RRR) has also been cut by about 50%, making trillions of dollars available to lend out to businesses and consumers.

There’s never been a better time to borrow money that today.

But Chinese aren’t irrational consumers. Many of them are still influenced by the hardships of the past. The young generation don’t get it but their parents do.

With the property market weak most of 2024, the reining in of excessive consumerism messaging is helping keep much of those savings in the bank.

That’s going to change dramatically as the property market recovers and people become increasingly confident about the future.

A string of strong sales from key cities and a bottoming of prices will have a big impact on consumer confidence. I’m not saying we’re there yet. But it looks like that’s where things are headed right now.