Chinese M2 money supply benchmark, including savings deposits, in July grew very slowly - a 15-month anti-record - for AMarkets materials.
In contrast, the M1 indicator (cash, checking accounts and term deposits) in July went up rapidly - 6-year-old record. This state of affairs suggests that companies are holding a lot of cash in the accounts and that the return on investment is very low - almost no options where to invest money to make money. The conclusion is simple: no matter how behaves China's stock market - the private sector saves cash.
Schedule - the dynamics of M1 and M2. 1997-2016 years .:
Schedule - Dynamics Shanghai Composite and M1:
In fact, the current rate of accumulation of Chinese cash are very similar to those that occurred in 1999/2000 and 2007, the peak: