Download or read book The Role of Household Saving in the Economic Rise of China written by Steven Lugauer and published by . This book was released on 2013 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: The saving rate in China is high by historical and international norms. The high saving rate has funded capital accumulation which in turn has been the primary driver of China's economic growth. We review the evidence on Chinese household saving and conduct a small study to assess the importance of the precautionary motive for saving.

Download or read book China s High Savings Drivers Prospects and Policies written by Ms.Longmei Zhang and published by International Monetary Fund. This book was released on 2018-12-11 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Download or read book Income Uncertainty and Household Savings in China written by Mr.Marcos Chamon and published by International Monetary Fund. This book was released on 2010-12-01 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: China’s household saving rate has increased markedly since the mid-1990s and the age-savings profile has become U-shaped. We find that rising income uncertainty and pension reforms help explain both of these phenomena. Using a panel of Chinese households covering the period 1989-2006, we document that strong average income growth has been accompanied by a substantial increase in income uncertainty. Interestingly, the permanent variance of household income remains stable while it is the transitory variance that rises sharply. A calibration of a buffer-stock savings model indicates that rising savings rates among younger households are consistent with rising income uncertainty and higher saving rates among older households are consistent with a decline in the pension replacement ratio for those retiring after 1997. We conclude that rising income uncertainty and pension reforms can account for over half of the increase in the urban household savings rate in China since the mid-1990s as well as the U-shaped age-profile of savings.

Download or read book Capitalizing China written by Joseph P. H. Fan and published by University of Chicago Press. This book was released on 2013 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: La 4e de couverture indique : "Despite a vast accumulation of private capital, China is not embracing capitalism. Deceptively familiar capitalist features disguise the profoundly unfamiliar foundations of "market socialism with Chinese characteristics." The Chinese Communist Party (CCP), by controlling the career advancement of all senior personnel in all regulatory agencies, all state-owned enterprises (SOEs), and virtually all major financial institutions state-owned enterprises (SOEs), and senior Party positions in all but the smallest non-SOE enterprises, retains sole possession of Lenin's Commanding Heights. The chapters in this volume examine China's high savings rate, banking system, financial markets, financial regulations, corporate governance, and public finances; and consider policy alternatives the CCP might consider if its goal is China's elevation into the ranks of high income countries."

Download or read book Cultural Influence on China s Household Saving written by Zhang-Ming Boffa and published by . This book was released on 2015 with total page 474 pages. Available in PDF, EPUB and Kindle. Book excerpt: "The recession following the 2008 Global Financial Crisis highlighted the problem of deficient household saving and imprudent consumer credit. Studies of selected economies reveal that household saving tends to decline as economies move to higher stages of development. Following rapid economic growth, China's household saving, possibly due to the influence of traditional culture, has remained high by international standards while consumer credit levels are low. This significant phenomenon has prompted the question of what this development trajectory may become as China proceeds to higher income levels. Whereas the economic, social and financial development factors related to household saving and development have been well researched, from the perspective of this investigation, there are missing 'cultural values' in the analysis. Consequently, the Institutional Economics concept of 'culture as a value' provides the basis for this thesis into the influence of culture on China's household saving and its effects. By extending Keynes's General Theory in relation to saving, and incorporating studies from both the Chinese and Western scholarly traditions, five themes are identified as influencing the cultural preferences of China's household saving. These are: (i) precautionary motives; (ii) habit formation; (iii) children's education; (iv) consumer credit; and (v) teaching thrift. The holistic approach of this study has allowed a deeper understanding of the role of cultural values on agency and structure in economic events and their subsequent impact on household saving. Results of this investigation indicate that the Confucian value of family ties and 'Zhong Yong' - the Golden Mean, which translates essentially as balance, enable Chinese households to save. This development has highlighted a growing tension, in China's modernity process, between the traditional Confucian value of thrift and the Western cultural influence of stimulating economic growth by consumption. After consideration of current saving practices and the anticipation of economic changes, this research advocates the striking of a balance between household saving and increasing consumption in China in order to avert a future financial crisis and to facilitate economic growth. The implication of this research is that finding a balance between household saving and consumption is crucial to sustainable future development in China as it shifts its development focus from investment and export-led to domestic consumption-driven growth and social development." -- Abstract.

Download or read book China s Economy in Transition written by Mr.Anoop Singh and published by International Monetary Fund. This book was released on 2013-11-07 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt: China's current account surplus has declined to around one-quarter the peak reached before the global financial crisis. While this is a major reduction in China's external imbalance, it has not been accompanied by a decisive shift toward consumption-based growth. Instead, the compression in its external surplus has been accomplished through increasing fixed investment so that it is now an even higher share of China's national economy. This increasing reliance on fixed investment as the main driver of China's growth raises questions about the durability of the compression in the external surplus and the sustainability of the current growth model that has had unprecedented success in lifting about 500 million people out of poverty over the last three decades. This volume examines various aspects of the rebalancing process underway in China, highlighting policy lessons for achieving stable, sustainable, and inclusive growth.

Download or read book China s Economic Rise written by Congressional Research Service and published by Createspace Independent Publishing Platform. This book was released on 2017-09-17 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior to the initiation of economic reforms and trade liberalization 36 years ago, China maintained policies that kept the economy very poor, stagnant, centrally-controlled, vastly inefficient, and relatively isolated from the global economy. Since opening up to foreign trade and investment and implementing free market reforms in 1979, China has been among the world's fastest-growing economies, with real annual gross domestic product (GDP) growth averaging nearly 10% through 2016. In recent years, China has emerged as a major global economic power. It is now the world's largest economy (on a purchasing power parity basis), manufacturer, merchandise trader, and holder of foreign exchange reserves.The global economic crisis that began in 2008 greatly affected China's economy. China's exports, imports, and foreign direct investment (FDI) inflows declined, GDP growth slowed, and millions of Chinese workers reportedly lost their jobs. The Chinese government responded by implementing a $586 billion economic stimulus package and loosening monetary policies to increase bank lending. Such policies enabled China to effectively weather the effects of the sharp global fall in demand for Chinese products, but may have contributed to overcapacity in several industries and increased debt by Chinese firms and local government. China's economy has slowed in recent years. Real GDP growth has slowed in each of the past six years, dropping from 10.6% in 2010 to 6.7% in 2016, and is projected to slow to 5.7% by 2022.The Chinese government has attempted to steer the economy to a "new normal" of slower, but more stable and sustainable, economic growth. Yet, concerns have deepened in recent years over the health of the Chinese economy. On August 11, 2015, the Chinese government announced that the daily reference rate of the renminbi (RMB) would become more "market-oriented." Over the next three days, the RMB depreciated against the dollar and led to charges that China's goal was to boost exports to help stimulate the economy (which some suspect is in worse shape than indicated by official Chinese economic statistics). Concerns over the state of the Chinese economy appear to have often contributed to volatility in global stock indexes in recent years.The ability of China to maintain a rapidly growing economy in the long run will likely depend largely on the ability of the Chinese government to implement comprehensive economic reforms that more quickly hasten China's transition to a free market economy; rebalance the Chinese economy by making consumer demand, rather than exporting and fixed investment, the main engine of economic growth; boost productivity and innovation; address growing income disparities; and enhance environmental protection. The Chinese government has acknowledged that its current economic growth model needs to be altered and has announced several initiatives to address various economic challenges. In November 2013, the Communist Party of China held the Third Plenum of its 18th Party Congress, which outlined a number of broad policy reforms to boost competition and economic efficiency. For example, the communique stated that the market would now play a "decisive" role in allocating resources in the economy. At the same time, however, the communique emphasized the continued important role of the state sector in China's economy. In addition, many foreign firms have complained that the business climate in China has worsened in recent years. Thus, it remains unclear how committed the Chinese government is to implementing new comprehensive economic reforms.China's economic rise has significant implications for the United States and hence is of major interest to Congress. This report provides background on China's economic rise; describes its current economic structure; identifies the challenges China faces to maintain economic growth; and discusses the challenges, opportunities, and implications of China's economic rise.

Download or read book Explaining China s Low Consumption The Neglected Role of Household Income written by Jahangir Aziz and published by International Monetary Fund. This book was released on 2007-07 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Chinese government has recently focused on the need to increase consumption to rebalance the economy. A widely held view is that despite China's remarkably high growth, the share of consumption in total expenditure has been low and declining due to high and rising saving rate of Chinese households as uncertainty over provision of pensions, and healthcare and education costs have increased since the mid-1990s. This paper finds that the rise in saving rate has been a minor factor. Much larger has been the role of the declining share of household income in national income, which has occurred across-the-board in wages, investment income, and government transfers. The paper finds that financial sector weaknesses, by restricting firms' access to bank financing for working capital, have played quantitatively a major role in keeping wage and investment income shares low and on a declining trend.

Download or read book Urban and Rural Household Savings in China written by International Monetary Fund and published by International Monetary Fund. This book was released on 1988-03-18 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Household savings behavior in China during the past 30 years has been studied by using econometric models with the time-varying-parameter technique. The rural sector and the urban sector are investigated separately. In comparison to previous studies on the same subject, the estimated models of the current study are more robust, and the results of the models are much more in line with results of similar studies of other countries.

Download or read book Sustaining China s Economic Growth After the Global Financial Crisis written by Nicholas R. Lardy and published by Peterson Institute. This book was released on 2012 with total page 213 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Targets Interest Rates and Household Saving in Urban China written by Mr.Malhar Nabar and published by International Monetary Fund. This book was released on 2011-10-01 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies a panel of China's provinces over the period 1996-2009 during which urban household saving rates increased from 19 percent of disposable income to 30 percent. It finds that the increase in urban saving rates is negatively associated with the decline in real interest rates over this period. This negative association suggests that Chinese households save with a target level of saving in mind. When the return to saving declines (increases), it becomes more difficult (easier) to meet a target and households increase (lower) their saving out of current disposable income to compensate. The results are robust across specifications and to the inclusion of additional variables. A main policy implication is that an increase in real deposit rates may help lower household saving and boost domestic consumption.

Download or read book China s High Saving Rate written by Guonan Ma and published by . This book was released on 2010 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: The saving rate of China is high from many perspectives - historical experience, international standards and the predictions of economic models. Furthermore, the average saving rate has been rising over time, with much of the increase taking place in the 2000s, so that the aggregate marginal propensity to save exceeds 50%. What really sets China apart from the rest of the world is that the rising aggregate saving has reflected high savings rates in all three sectors - corporate, household and government. Moreover, adjusting for inflation alters interpretations of the time path of the propensity to save in the three sectors. Our evidence casts doubt on the proposition that distortions and subsidies account for China's rising corporate profits and high saving rate. Instead, we argue that tough corporate restructuring (including pension and home ownership reforms), a marked Lewis-model transformation process (where the average wage exceeds the marginal product of labour in the subsistence sector) and rapid ageing process have all played more important roles. While such structural factors suggest that the Chinese saving rate will peak in the medium term, policies for job creation and a stronger social safety net would assist the transition to more balanced domestic demand.

Download or read book Determinants of China s Private Consumption written by Kai Guo and published by International Monetary Fund. This book was released on 2010-04-01 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper gauges the key determinants of China's private consumption in relation to GDP using data on the Chinese economy and evidence from other countries' experiences. The results suggest there is nothing "special" about consumption in China. Rather, the challenge is to explain why the conditioning variables-notably a low level of service sector employment, the level of financial sector development, and low real interest rates-are so different in China relative to other countries' historical experience. The results suggest, in particular, that efforts to further raise household income and the share of employment in the services sector, as well as to develop capital markets, including liberalizing interest rates and creating alternative savings instruments are likely to have the biggest impact on consumption. Other mechanisms to raise household income and mitigate household-specific risk (such as by improving the healthcare and pension systems) also have a role to play.

Download or read book Public Expenditures on Social Programs and Household Consumption in China written by Mr.David Coady and published by International Monetary Fund. This book was released on 2010-03-01 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper shows that increasing government social expenditures can make a substantive contribution to increasing household consumption in China. The paper first undertakes an empirical study of the relationship between the savings rate and social expenditures for a panel of OECD countries and provides illustrative estimates of their implications for China. It then applies a generational accounting framework to Chinese household income survey data. This analysis suggests that a sustained 1 percent of GDP increase in public expenditures, distributed equally across education, health, and pensions, would result in a permanent increase the household consumption ratio of 11⁄4 percentage points of GDP.

Download or read book China 2049 written by David Dollar and published by Brookings Institution Press. This book was released on 2020-06-09 with total page 444 pages. Available in PDF, EPUB and Kindle. Book excerpt: How will China reform its economy as it aspires to become the next economic superpower? It's clear that China is the world's next economic superpower. But what isn't so clear is how China will get there by the middle of this century. It now faces tremendous challenges such as fostering innovation, dealing with ageing problem and coping with a less accommodative global environment. In this book, economists from China's leading university and America's best-known think tank offer in depth analyses of these challenges. Does China have enough talent and right policy and institutional mix to transit from input-driven to innovation-driven economy? What does ageing mean, in terms of labor supply, consumption demand and social welfare expenditure? Can China contain the environmental and climate change risks? How should the financial system be transformed in order to continuously support economic growth and keep financial risks under control? What fiscal reforms are required in order to balance between economic efficiency and social harmony? What roles should the state-owned enterprises play in the future Chinese economy? In addition, how will technological competition between the United States and China affect each country's development? Will the Chinese yuan emerge as a major reserve currency, and would this destabilize the international financial system? What will be China's role in the international economic institutions? And will the United States and other established powers accept a growing role for China and the rest of the developing world in the governance of global institutions such as the World Trade Organization and the International Monetary Fund, or will the world devolve into competing blocs? This book provides unique insights into independent analyses and policy recommendations by a group of top Chinese and American scholars. Whether China succeeds or fails in economic reform will have a large impact, not just on China's development, but also on stability and prosperity for the whole world.

Download or read book Income Uncertainty and Household Savings in China written by Marcos Chamon and published by . This book was released on 2015 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: China's household saving rate has increased markedly since the mid-1990s and the age-savings profile has become U-shaped during the 2000s. We find that rising income uncertainty and pension reforms help explain both of these phenomena. Using a panel of Chinese households covering the period 1989-2006, we document that strong average income growth has been accompanied by a substantial increase in income uncertainty. Interestingly, the permanent variance of household income remains stable while it is the transitory variance that rises sharply. A calibration of a buffer-stock savings model indicates that rising savings rates among younger households are consistent with rising income uncertainty and higher saving rates among older households are consistent with a decline in the pension replacement ratio for those retiring after 1997. We conclude that rising income uncertainty and pension reforms can account for over half of the increase in the urban household savings rate in China since the mid-1990s as well as the U-shaped age-saving profile.

Download or read book Why are Saving Rates of Urban Households in China Rising written by Marcos Chamon and published by INTERNATIONAL MONETARY FUND. This book was released on 2008-06-01 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: From 1995 to 2005, the average urban household saving rate in China rose by 7 percentage points, to ¼ of disposable income. We use household-level data to explain the postponing of consumption despite rapid income growth. Tracing cohorts over time indicates virtually no consumption smoothing over the life cycle. Saving rates have increased across all demographic groups, although the age-profile of savings has an unusual U-shaped pattern, with saving rates being the highest among the youngest and oldest households in recent years. These patterns are best explained by the rising private burden of expenditures on housing, education, and health care.