Renminbi savings in Chinese bank accounts are slowing, but economists hesitate to conclude that it will lead to increased domestic demand, believing the savings are shifting to the bullish stock market.

A central bank report showed Renminbi savings reached 15.97 trillion yuan (1.99 trillion U.S. dollars) in November, up 15.3 percent from the same period last year, 0.2 percentage points lower than the rise in October.

New savings in November were 168.3 billion yuan, only 600 million yuan more than November last year.

In October, savings dropped 7.6 billion yuan from the September figure, which was the first monthly decline since June 2001.

It is expected the slowdown will stimulate domestic consumption, but economists believe it is still too early to come to that conclusion.

"The money was invested in stocks and funds, not in industrial fields," said Zhao Xijun, deputy dean of the School of Finance at Renmin University.

Zhao's remarks were confirmed by the central bank, which explained that active stock trading had drained some of the savings.

The country's securities dealers had a total client margin balance of 604.2 billion yuan in October, which was 216.1 billion yuan more than September and an increase of 182.9 percent from the same period last year.

The bullish stock market has led to a booming investment in funds. Eighty-nine funds were launched in 2006 and have raised 388.77 billion yuan, quadruple the figure in 2005.

The structure of Chinese families' financial assets is changing with more urban residents choosing stocks and funds instead of savings as major financial assets, said the central bank.

"The savings dropped because people have diversified ways of managing their money", said Ding Zhijie, a finance professor with the University of International Business and Economics. "Domestic demand cannot be viewed as activated until people start consuming."

China's high savings rate is attributed to low consumer confidence because of high employment pressures and costly education, housing and medical care, said analysts.

The government has said that it will double the efforts to stimulate domestic consumption in 2007, mainly by raising the incomes of farmers and low income urban families.