Understanding Chinese consumption: The impact of hukou
AbstractThe Chinese growth miracle was based on exports and investment in recent years. While strong output growth has been maintained even during the financial crisis, the imbalances within the country increased. To return to a more sustainable path of development, policies are directed to improve the role of private consumption. However, the institutional framework is an impediment to the transformation, as it weakens the incentives of households to consume. Besides a low degree of social security and highly regulated financial markets, we stress the relevance of the hukou system as the main driver for modest consumption, especially in recent years. After controlling for different income levels, the average propensity to consume is significantly lower for migrants, as their access to public services is limited. The downward pressure on consumption will increase in the future. The urbanization strategy of the government will likely raise the number of migrants with limited hukou rights, if it is not accompanied by respective reforms. Therefore, the transformation towards consumption driven growth is endangered without further reforms. --
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics in its series Discussion Papers with number 343.
Date of creation: 2013
Date of revision:
Contact details of provider:
Postal: Grosse Scharrnstrasse 59, 15230 Frankfurt (Oder)
Phone: +49 (0)335 5534 2387
Fax: +49 (0)335 5534 2516
Web page: http://www.wiwi.euv-frankfurt-o.de/en/index.html
More information through EDIRC
Chinese private consumption; urbanization strategy; hukou system;
Other versions of this item:
- Christian Dreger & Tongsan Wang & Yanqun Zhang, 2013. "Understanding Chinese Consumption: The Impact of Hukou," Discussion Papers of DIW Berlin 1341, DIW Berlin, German Institute for Economic Research.
- Dreger, Christian & Wang, Tongsan & Zhang, Yanqun, 2013. "Understanding Chinese Consumption: The Impact of Hukou," IZA Discussion Papers 7819, Institute for the Study of Labor (IZA).
- Dreger, Christian & Wang, Tongsan & Zhang, Yanqun, 2014. "Understanding Chinese consumption: The impact of hukou," BOFIT Discussion Papers, Bank of Finland, Institute for Economies in Transition 7/2014, Bank of Finland, Institute for Economies in Transition.
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-12-29 (All new papers)
- NEP-MAC-2013-12-29 (Macroeconomics)
- NEP-TRA-2013-12-29 (Transition Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shang-Jin Wei & Xiaobo Zhang, 2011.
"The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China,"
Journal of Political Economy, University of Chicago Press,
University of Chicago Press, vol. 119(3), pages 511 - 564.
- Shang-Jin Wei & Xiaobo Zhang, 2009. "The Competitive Saving Motive: Evidence from Rising Sex Ratios and Savings Rates in China," NBER Working Papers 15093, National Bureau of Economic Research, Inc.
- Steckel, Richard H., 2009.
"Heights and human welfare: Recent developments and new directions,"
Explorations in Economic History, Elsevier,
Elsevier, vol. 46(1), pages 1-23, January.
- Richard H. Steckel, 2008. "Heights and Human Welfare: Recent Developments and New Directions," NBER Working Papers 14536, National Bureau of Economic Research, Inc.
- Xin Wang & Yi Wen, 2012.
"Housing prices and the high Chinese saving rate puzzle,"
Working Papers, Federal Reserve Bank of St. Louis
2012-038, Federal Reserve Bank of St. Louis.
- Wang, Xin & Wen, Yi, 2012. "Housing prices and the high Chinese saving rate puzzle," China Economic Review, Elsevier, Elsevier, vol. 23(2), pages 265-283.
- Franklin Allen & Jun “QJ” Qian & Chenying Zhang & Mengxin Zhao, 2012.
"China’s Financial System: Opportunities and Challenges,"
NBER Working Papers
17828, National Bureau of Economic Research, Inc.
- Franklin Allen & Jun & Chenying Zhang & Mengxin Zhao, 2012. "China's Financial System: Opportunities and Challenges," NBER Chapters, in: Capitalizing China, pages 63-143 National Bureau of Economic Research, Inc.
- Feng, Jin & He, Lixin & Sato, Hiroshi, 2009. "Public pension and household saving: Evidence from China," BOFIT Discussion Papers, Bank of Finland, Institute for Economies in Transition 2/2009, Bank of Finland, Institute for Economies in Transition.
- Ma, Guonan & Yang, Dennis T., 2013. "China's High Saving Puzzle," IZA Discussion Papers 7223, Institute for the Study of Labor (IZA).
- Riccardo Cristadoro & Daniela Marconi, 2011.
"Households' savings in China,"
Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area
838, Bank of Italy, Economic Research and International Relations Area.
- Riccardo Cristadoro & Daniela Marconi, 2012. "Household savings in China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, Taylor & Francis Journals, vol. 10(3), pages 275-299, November.
- Barry Naughton, 2007. "The Chinese Economy: Transitions and Growth," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262640643, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).
If references are entirely missing, you can add them using this form.