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Why are Saving Rates so High in China?

  • 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)

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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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. Tamim Bayoumi & Hui Tong & Shang-Jin Wei, 2010. "The Chinese Corporate Savings Puzzle: A Firm-level Cross-country Perspective," NBER Working Papers 16432, National Bureau of Economic Research, Inc.
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