Working Paper: NBER ID: w16771
Authors: 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.
Keywords: Saving Rates; China; National Saving; Economic Growth
JEL Codes: D91; E21; O53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| government taxes on production (H29) | government saving rate (H60) |
| collection of social security fees (H55) | government saving rate (H60) |
| government income growth (O49) | government consumption (E20) |
| government income growth (O49) | government saving rate (H60) |
| rise in profitability (L21) | corporate saving (G30) |
| improved productivity and export growth (O49) | rise in profitability (L21) |
| rising income inequality (D31) | household saving rates (D14) |
| decline in child dependency ratios (J19) | household saving rates (D14) |
| government saving rate + corporate saving + household saving (D14) | high saving rates in China (E21) |