“If an individual puts 100 million yuan in the bank on the last day of this year, he or she will receive 200,000 to 300,000 in interest for the single-day saving, a source told Caixin. At the end of the second quarter, the one-day interest rate was only 0.1 percent.”
If one of the Chinese government’s goals is to stem the flow of foreign capital pouring into the country, incentives like this are not not what officials had in mind.
In September, some banks were forced to halt offering free travel, school fees and other bonuses to depositors. At that time, the government had also raised reserves requirements which the banks honored in principle by tried to avoid in practice.
A free trip to Hong Kong is one thing, but, if the report from Caixin is accurate, 30% interest is quite another. Just sayin’.
Paul Ausick
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