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Why Are Saving Rates So High in China?

In: Capitalizing China

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  • Dennis Tao Yang
  • Junsen Zhang
  • Shaojie Zhou

Abstract

In this paper, we define “The Chinese Saving Puzzle” as the persistently high national saving rate at 34–53 percent of gross domestic product (GDP) in the past three decades and a surge in the saving rate by 11 percentage points from 2000–2008. Using data from the Flow of Funds Accounts (FFA) and Urban Household Surveys (UHS) supplemented by the findings from existing studies, we analyze the sources and causes of China’s high and rising saving rates in the government, corporate, and household sectors. Although the causes of China’s high saving are complex, we suggest that the evolving economic, demographic, and policy trends in the internal and external environments of the Chinese economy will likely lead to a decline in national saving in the foreseeable future.

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This chapter was published in:

  • Joseph Fan & Randall Morck, 2012. "Capitalizing China," NBER Books, National Bureau of Economic Research, Inc, number morc10-1, July.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 12068.

    Handle: RePEc:nbr:nberch:12068

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    1. Jefferson, Gary H. & Su, Jian, 2006. "Privatization and restructuring in China: Evidence from shareholding ownership, 1995-2001," Journal of Comparative Economics, Elsevier, vol. 34(1), pages 146-166, March.
    2. Bai, Chong-En & Lu, Jiangyong & Tao, Zhigang, 2007. "How Does Privatization Work in China?," MPRA Paper 6599, University Library of Munich, Germany.
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