China’s High Savings: Drivers, Prospects, and Policies

Author/Editor:

Longmei Zhang ; Ray Brooks ; Ding Ding ; Haiyan Ding ; Hui He ; Jing Lu ; Rui Mano

Publication Date:

December 11, 2018

Electronic Access:

Free Full Text. Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

China’s high national savings rate—one of the highest in the world—is at the heart of its external/internal imbalances. High savings finance elevated investment when held domestically, or lead to large external imbalances when they flow abroad. Today, high savings mostly emanate from the household sector, resulting from demographic changes induced by the one-child policy and the transformation of the social safety net and job security that occured during the transition from planned to market economy. Housing reform and rising income inequality also contribute to higher savings. Moving forward, demographic changes will put downward pressure on savings. Policy efforts in strengthening the social safety net and reducing income inequality are also needed to reduce savings further and boost consumption.

Series:

Working Paper No. 18/277

Subject:

English

Publication Date:

December 11, 2018

ISBN/ISSN:

9781484388778/1018-5941

Stock No:

WPIEA2018277

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

38

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