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Why are Saving Rates so High in China?

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  • Dennis Tao Yang

    (The Chinese University of Hong Kong and Hong Kong Institute for Monetary Research)

  • Junsen Zhang

    (The Chinese University of Hong Kong)

  • Shaojie Zhou

    (Tsinghua University)

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 to 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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Bibliographic Info

Paper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 312010.

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Length: 34 pages
Date of creation: Dec 2010
Date of revision:
Handle: RePEc:hkm:wpaper:312010

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  1. Aart Kraay, 2000. "Household Saving in China," World Bank Economic Review, World Bank Group, vol. 14(3), pages 545-570, September.
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  19. Bai, Chong-En & Lu, Jiangyong & Tao, Zhigang, 2009. "How does privatization work in China?," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 453-470, September.
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  23. Ma, Guonan & Yang, Dennis T., 2013. "China's High Saving Puzzle," IZA Discussion Papers 7223, Institute for the Study of Labor (IZA).
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