Understanding High Saving Rate in China
This paper presents a detailed analysis of the Chinese saving rate based on the flow of funds data. It finds that the most widely adopted view of precautionary saving, which is regarded as the top reason for maintaining a high saving rate in China, is misleading because this conclusion is drawn from the household survey data. In fact, the household saving rate has declined dramatically since the mid-1990s, as is observed from the flow of funds framework. The high national saving rate is attributed to the increasing shares of both government and corporation disposable incomes. Insufficient consumption demand is caused by the persistent decrease in percentage share of household to national disposable income. Government- directed income redistribution urgently needs to be improved to accelerate consumption, which in turn would make the Chinese economy less investment-led and help to reduce the current account surplus. Copyright The official journal of The Institute of World Economics and Politics, Chinese Academy of Social Sciences (CASS) 2007.
Year of publication: |
2007
|
---|---|
Authors: | He, Xinhua ; Cao, Yongfu |
Published in: |
China & World Economy. - Institute of World Economics and Politics. - Vol. 15.2007, 1, p. 1-13
|
Publisher: |
Institute of World Economics and Politics |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Understanding high saving rate in China
He, Xinhua, (2007)
-
Inclusive, balanced, sustained growth in the Asia-Pacific
Cao, Yongfu, (2010)
-
Inclusive, Balanced, Sustained Growth in the Asia-Pacific
Cao, Yongfu, (2010)
- More ...