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    This document summarizes an IMF working paper on China's high savings rate. It discusses that China has one of the highest national savings rates in the world, which finances high investment domestically or leads to large trade imbalances abroad. The paper finds that household savings, resulting from China's one-child policy and changes to its social safety net, are now the main driver of high savings. Demographic changes and reforms to strengthen social protections and reduce inequality could help lower China's high savings rate in the future.

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    This document summarizes an IMF working paper on China's high savings rate. It discusses that China has one of the highest national savings rates in the world, which finances high investment domestically or leads to large trade imbalances abroad. The paper finds that household savings, resulting from China's one-child policy and changes to its social safety net, are now the main driver of high savings. Demographic changes and reforms to strengthen social protections and reduce inequality could help lower China's high savings rate in the future.

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    © All Rights Reserved
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    6 views3 pages

    China's High Savings - Drivers, Prospects, and Policies

    Uploaded by

    surambaya
    This document summarizes an IMF working paper on China's high savings rate. It discusses that China has one of the highest national savings rates in the world, which finances high investment domestically or leads to large trade imbalances abroad. The paper finds that household savings, resulting from China's one-child policy and changes to its social safety net, are now the main driver of high savings. Demographic changes and reforms to strengthen social protections and reduce inequality could help lower China's high savings rate in the future.

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    INTERNATIONAL
    MONETARY FUND

    INTERNATIONAL
    MONETARY FUND

    INTERNATIONAL
    MONETARY FUND

    INTERNATIONAL
    MONETARY FUND

    INTERNATIONAL
    MONETARY FUND

    INTERNATIONAL
    MONETARY FUND

    INTERNATIONAL
    MONETARY FUND INTERNATIONAL
     MONETARY FUND
    INTERNATIONAL INTERNATIONAL
    MONETARY FUND MONETARY FUND

    ABOUT RESEARCH COUNTRIES CAPACITY DEVELOPMENT NEWS VIDEOS

    DATA PUBLICATIONS SOCIAL

    IMF WORKING PAPERS

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


    Author/Editor: Longmei Zhang (/en/Publications/Publications-By-Author?
    author=Longmei++Zhang&name=Longmei Zhang) ; Ray Brooks
    (/en/Publications/Publications-By-Author?author=Ray++Brooks&name=Ray
    Brooks) ; Ding Ding (/en/Publications/Publications-By-Author?

    https://www.imf.org/en/Publications/WP/Issues/2018/12/11/Chinas-High-Savings-Drivers-Prospects-and-Policies-46437 1/3
    author=Ding++Ding&name=Ding Ding) ; Haiyan Ding
    (/en/Publications/Publications-By-Author?author=Haiyan++Ding&name=Haiyan
    Ding) ; Hui He (/en/Publications/Publications-By-Author?
    author=Hui++He&name=Hui He) ; Jing Lu (/en/Publications/Publications-By-
    Author?author=Jing++Lu&name=Jing Lu) ; Rui Mano
    (/en/Publications/Publications-By-Author?author=Rui++Mano&name=Rui
    Mano)

    Publication Date: December 11, 2018

    Electronic Access: Free Download (/~/media/Files/Publications/WP/2018/wp18277.ashx). Use the


    free Adobe Acrobat Reader (http://www.imf.org/adobe) 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: China, People's Republic of (/en/Publications/Publications-By-Subject?


    subject=China, People's Republic of) Demographic indicators
    (/en/Publications/Publications-By-Subject?subject=Demographic indicators)
    Government expenditures (/en/Publications/Publications-By-Subject?
    subject=Government expenditures) Housing (/en/Publications/Publications-By-
    Subject?subject=Housing) Income inequality (/en/Publications/Publications-By-
    Subject?subject=Income inequality) Savings (/en/Publications/Publications-By-
    Subject?subject=Savings) Social safety nets

    ENGLISH

    Publication Date: December 11, 2018

    ISBN/ISSN: 9781484388778/1018-5941

    Stock No: WPIEA2018277

    Format: Paper

    Pages: 38

    Please address any questions about this title to publications@imf.org (mailto:publications@imf.org)

    https://www.imf.org/en/Publications/WP/Issues/2018/12/11/Chinas-High-Savings-Drivers-Prospects-and-Policies-46437 2/3
    https://www.imf.org/en/Publications/WP/Issues/2018/12/11/Chinas-High-Savings-Drivers-Prospects-and-Policies-46437 3/3

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