For the first time in half a decade, private savings seem to have stopped growing. Figures from the People's Bank of China (PBOC), China's central bank, show that renminbi savings deposits fell by 7.6 billion yuan (970 million U.S. dollars) in October compared with September.

True, total bank savings stood at 15.8 trillion yuan (2.02 trillion dollars) in the month, which was about 15.5 percent more than in the same period last year, but that was still half a percentage point less than in September, and the slowest rate of year-on-year expansion in the past 18 months. In other words, the pace of growth in savings seems to be slowing.

The latest statistics show that though savings deposits rebounded somewhat to 15.97 trillion yuan (2.04 trillion U.S. dollars) in November, due to a moderate rise in demand deposits, the growth of time deposits, which account for about two thirds of all savings deposits, was still less than in the previous month.

Is this a sign that domestic consumption something that economists everywhere see as a boon to economic growth is finally picking up?

The PBOC argues that shrinking savings are a function of the growing trade in stocks. However, other economists say consumer spending is growing.

Despite the different explanations for why savings are slowing, observers seem to agree that it would be a fine thing indeed if the October drop became a trend in the coming months.

According to the central bank, the dip in renminbi savings was the result of growing enthusiasm in the domestic stock market, which is having its first bull run after almost six years in the doldrums. Many stocks have picked up in recent weeks, diverting more money away from banks. In October, the amount of money entrusted to securities companies to buy stocks reached 604.2 billion yuan (77.2 billion dollars), or 216.1 billion yuan (27.6 billion dollars) more than in the previous month - and up nearly 183 percent from the same period last year. The flow of money into the stock market has accelerated since the benchmark Shanghai composite index surpassed the record high of 2,245 in December. The last time the index was that high was in mid 2001.

Individual investors are rushing into the market in large numbers. The number of mutual fund buyers almost doubled last year, ending November at 2.66 million, compared with 1.46 million at the end of 2005. It is still not clear how big of a role corporate investors have played.

Not everyone accepts the stocks theory, though.

Song Guoqing, an economist with the China Center for Economic Research (CCER) at Peking University, said he doubted the causal relationship between savings and stock market investment.

Instead, he said he saw seasonal factors at play. Statistics from the past 72 months indicate that savings rates generally slow in May and October.

There is evidence that consumer spending increases during these two months because of the national holidays in May and October. In 1999, the government extended the Chinese New Year (in January or February), May Day and National Day (in October) holidays to a full week from the traditional two days, creating what are called the "golden weeks" for shopping and traveling.

Figures from the National Holiday Office, which is affiliated to the National Tourism Administration, showed that the country reaped 55.9 billion yuan (7.1 billion dollars) in tourism revenues during last year's October golden week, up 20.7 percent over the same period the year before.

In other words, the golden weeks, particularly the one in October, are peak times for consumer spending.

According to information from the National Bureau of Statistics, retail sales hit 699.8 billion yuan (89.4 billion dollars) in October, representing a surge of 14.3 percent year-on-year. This is significant, as retail sales have been on the increase since the beginning of last year.

Retail sales rose 13.3 percent year-on-year in the first half of last year. That rate grew to 13.6 percent year-on-year in October and November.

There is little doubt that consumer spending and retail sales will both be relatively strong this year. Still, they may not be strong enough to have much effect on the nation's low rate of domestic consumption (consumption's share of total GDP).

Domestic consumption's share of GDP declined to 53.9 percent last year from 61.1 percent in 2001. The global average is 78 percent, according to Chinese economic journals.

"In the long run, the structural problem of a high savings rate and low consumption is a key challenge we can hardly address in the short term," Su Ning, deputy governor of the People's Bank of China, told a financial forum in November.

A recent report by the World Bank also urged China to rebalance its economy by expanding domestic consumption.

China's unnecessarily large and still increasing current account surplus (now worth more than 1 trillion dollars) is also due to insufficient domestic consumer spending, said Stephen King, chief economist at HSBC Group.

The central government has signalled its intention to make domestic consumption a major engine of economic growth, while easing the country's dependence on investment and exports. To support this objective, there have been gradual wage increases and welfare spending in recent years, and more have been promised.

Could it be that all the efforts and promises that for so long yielded little have finally begun to work? At the moment, people can only answer: "Maybe."