People visit Jianchang ancient city during the Spring Festival holiday in Xichang, southwest China's Sichuan Province, on Jan. 27, 2023. (Photo by Li Jieyi/Xinhua)

Financial experts anticipate that the pent-up demand for consumption in China will be further unleashed as household savings in the country reached a new high last year.

In 2022, China's new household deposits soared by 17.84 trillion yuan (about 2.57 trillion U.S. dollars), 7.94 trillion yuan more than the previous year, Liu Guoqiang, deputy governor of the People's Bank of China, earlier told a press conference.

Liu attributes the increase in savings to the changes in consumption and investment. "The COVID-19 epidemic has had a certain impact on consumption, while residents' risk appetite decreased and investment growth slowed down, thus promoting deposits," he said.

A depository survey from the central bank showed that 61.8 percent of residents intended to save more money in the fourth quarter of 2022, up 10 percentage points year on year, while those who preferred to spend more accounted for 22.8 percent, down 1.9 percentage points from the previous year.

Accordingly, one concern about the Chinese economy was that, despite reopening, people might continue to worry about COVID-19 and not return to normal life. Hence, their collective actions would lead to some permanent scars in consumption.

However, data on consumption and mobility during the Chinese New Year holiday have likely put such concerns to rest, Morgan Stanley Chief China Economist Robin Xing told Xinhua in a recent interview.

"The bulk of this extra saving is precautionary as consumers saved more because of uncertain income outlook, and this process could be partially reversed," Xing said.

China's consumption has been recovering quickly, with some sectors almost returning to their pre-pandemic levels.

During China's weeklong Spring Festival holiday that ended on Jan. 27, some 308 million domestic trips were made, up 23.1 percent from the same holiday last year, according to the Ministry of Culture and Tourism.

Other industries such as retail and catering are also thriving. The combined revenues of major retail and catering businesses rose 6.8 percent from the last Spring Festival holiday, the Ministry of Commerce said.

After the optimization of epidemic prevention and control policies, consumption has been significantly released, but it still needs a heating process, according to Liu.

To boost consumption and rational investment, the central bank will continue to precisely implement a prudent monetary policy, provide sound financial services for residents and strong financial support for the development of the real economy, Liu said.

As the recovery of the macro economy continues, people's confidence in consumption and investment will be further enhanced, and household savings will gradually return to normal as well, he added.

Echoing Liu's views, Xing said that real private consumption appears set to grow over 9 percent from a low base, lifting headline GDP by 3.8 percentage points, as the job market recovery boosts incomes, normalizes consumption appetites, and possibly reduces excess savings.