Fresh data shows that money in the markets is doing well but money in the banks isn't as China's commercial banks are having headaches attracting corporate deposits. The People's Bank of China reports that total savings in current accounts in the first half of this year fell 50 billion yuan. Where has all the money gone? Our Chen Tong has the story.  

The fall in current account deposits is mainly due to companies keeping less cash on hand. Current account deposits were down to only 48.6 trillion yuan as of the end of June. While individuals were putting more cash into their current accounts, however, deposits from corporations dropped by 790 billion yuan over the first six months of the year. So where did the money go? Anywhere offering higher interest rates, of course. The central bank says corporate funds placed in time deposit accounts increased by 980 billion yuan during the same period. Some companies have also been putting money in asset management products outside the commercial banking system. As of the end of June, the total size of China's money market funds had hit 7.7 trillion yuan, a one trillion yuan increase from the end of last year.

FENG MEIYUN, GENERAL MANAGER SHANGHAI JINRONG INFO TECH "Most brokerages have special asset management products for companies which offer much higher yield rate, including interest rate swaps, OTC options and bonds. Those products have higher earnings than products offered to individual investors."

The commercial banks' problems in getting cash from companies are not confined to interest rates only. China's deleveraging efforts have meant the companies have less money to put into their bank accounts.

CHEN JI, SENIOR ANALYST BANK OF COMMUNICATIONS "We are seeing that the rate of increase in M1 and M2 have both declined. So the falling size of current deposit accounts is not unusual. Commercial banks play the role of a third-party agent in social finance. They provide loans to companies and that creates more savings for companies, and banks use those savings to make new loans all over again. The fall in corporate deposits is being caused by financial deleveraging and the strict supervision of company credit."

Things may not be entirely bleak, however. Experts point out that modified asset management regulations issued by the central bank and the Banking and Insurance Regulatory Commission late Friday, mean that public funds can now invest in a greater variety of projects, and that this should give companies easier access to financing.