From Xiandai Kuaibao via Xinhua News Agency (in Chinese), translated by CDT (link):
Three reasons are behind the dropping consumption among Chinese and rising deposits: unstable income level, uncertain spendings and unsound consumption credit system.
People have to increase their deposits, as a result of increased uncertainty in their job stability, as more competition is replacing the old-time “iron rice bowl,” said Chen Xinnian, an expert with the State Development and Reform Commission, a kay economic planner. More consumption pressure has been kicking in as the economy is becoming more market-oriented, instead of state-financed consumption items like housing, health insurance, etc. before. With the credit system still underdeveloped, Chen said, it also has a negative impact on stimulating consumption, which accounts for only 10% of the country’s total credit volume.
