In many parts of Asia, households are finally learning to love risk. In Japan, a combination of policy, demographics and a search for yield have seen a new generation of savers pour into equities, pushing the benchmark Nikkei 225 index to record highs last year. In South Korea, retail investors have become a market-moving force, helping lift the Kospi index by two-thirds during 2025.
China has followed a different path. Last year, households were hoarding cash at unprecedented levels: in September they added nearly Rmb3tn to their deposits, the largest increase in six months, to reach a record Rmb160tn even as the yield on deposits has continued to fall. That risk aversion rose across asset classes, leaving local equities among one of the worst casualties.
With domestic savers reluctant to engage with the stock market, the benchmark CSI 300 Index, which tracks China’s largest blue-chip stocks listed on the Shanghai and Shenzhen exchanges, has lagged regional peers. It trades at a modest 14 times forward earnings as foreign investors have continued to pull money out of Chinese equities over the past two years. Domestic mutual fund inflows have also slowed.