This paper presents a detailed analysis of the Chinese saving rate based on the flow offunds data. It finds that the most widely adopted view of precautionary saving, which is regarded as the top reason for maintainin...This paper presents a detailed analysis of the Chinese saving rate based on the flow offunds data. It finds that the most widely adopted view of precautionary saving, which is regarded as the top reason for maintaining a high saving rate in China, is misleading because this conclusion is drawn from the household survey data. In fact, the household saving rate has declined dramatically since the mid-1990s, as is observed from the flow of funds framework. The high national saving rate is attributed to the increasing shares of both government and corporation disposable incomes. Insufficient consumption demand is caused by the persistent decrease in percentage share of household to national disposable income. Governmentdirected income redistribution urgently needs to be improved to accelerate consumption, which in turn would make the Chinese economy less investment-led and help to reduce the current account surplus.展开更多
China's current account surplus declined significantly from its peak of nearly 10 percentof GDP in 2007 to less than 1 percent in 2018.The new pattern offered fresh evidencefor our understanding of China's cur...China's current account surplus declined significantly from its peak of nearly 10 percentof GDP in 2007 to less than 1 percent in 2018.The new pattern offered fresh evidencefor our understanding of China's current account dynamics.In this paper,we used flowof funds data to gauge its underlying driving forces.Specifically,by employing indexdecomposition analysis,we decomposed the current account from the perspective ofsavings and investment into three sectors:the household,corporate,and governmentsectors.We found that the decline in China's current account ratio was first driven bycyclical factors,i.e.weak corporate saving growth induced by the economic slump in2009 as well as the following massive corporate investment bolstered by the governmentstimulus plan.However,such cyclical factors quickly subsided,and the subsequentcurrent account balance reduction was later supported by structural factors,i.e.household savings declined enduringly and the Chinese government switched to a moreexpansionary fiscal policy.There are three possible explanations for the structuralmovement:reduced precautionary saving due to higher social security coverage ratio,lower corporate profits as a result of economic slowdown,and a twin deficit due to thegovernment's more relaxed fiscal stance.The new facts,however,were not consistent withother current account theories focusing on long-term aspects of the saving-investmentaccount puzzle,especially those relating to China's special demographic characteristics.展开更多
文摘This paper presents a detailed analysis of the Chinese saving rate based on the flow offunds data. It finds that the most widely adopted view of precautionary saving, which is regarded as the top reason for maintaining a high saving rate in China, is misleading because this conclusion is drawn from the household survey data. In fact, the household saving rate has declined dramatically since the mid-1990s, as is observed from the flow of funds framework. The high national saving rate is attributed to the increasing shares of both government and corporation disposable incomes. Insufficient consumption demand is caused by the persistent decrease in percentage share of household to national disposable income. Governmentdirected income redistribution urgently needs to be improved to accelerate consumption, which in turn would make the Chinese economy less investment-led and help to reduce the current account surplus.
基金the National Natural Science Foundation of China(Nos.71773125,71973142,and 71673028)Important Projects in the Scientific Innovation of CASS(Research on the Major Risks of China in the Next 15 Years).
文摘China's current account surplus declined significantly from its peak of nearly 10 percentof GDP in 2007 to less than 1 percent in 2018.The new pattern offered fresh evidencefor our understanding of China's current account dynamics.In this paper,we used flowof funds data to gauge its underlying driving forces.Specifically,by employing indexdecomposition analysis,we decomposed the current account from the perspective ofsavings and investment into three sectors:the household,corporate,and governmentsectors.We found that the decline in China's current account ratio was first driven bycyclical factors,i.e.weak corporate saving growth induced by the economic slump in2009 as well as the following massive corporate investment bolstered by the governmentstimulus plan.However,such cyclical factors quickly subsided,and the subsequentcurrent account balance reduction was later supported by structural factors,i.e.household savings declined enduringly and the Chinese government switched to a moreexpansionary fiscal policy.There are three possible explanations for the structuralmovement:reduced precautionary saving due to higher social security coverage ratio,lower corporate profits as a result of economic slowdown,and a twin deficit due to thegovernment's more relaxed fiscal stance.The new facts,however,were not consistent withother current account theories focusing on long-term aspects of the saving-investmentaccount puzzle,especially those relating to China's special demographic characteristics.