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An alternative explanation for high saving in China: Rising inequality
Xinhua Gu; Pui Sun Tam; Guoqiang Li; Qingbin Zhao
2018-12
Conference NameThe Fourth International Conference on The Chinese Economy: Present and Future
Source PublicationInternational review of economics & finance
Conference Date2017-12-16
Conference PlaceBeijing, P.R. China
Abstract

This paper examines potential factors contributing to China's originally high and subsequently rising rate of aggregate saving prior to the global financial crisis. We find strong evidence that the high and rising level of income inequality in China is a significant mover of its savings glut. Behavioral inertia, income growth, industrial structure, and policy orientation (fiscal receipts and real interest rates) are also found to be responsible for high saving that, however, is somewhat alleviated by rising old dependency under population ageing. The policy implication of our findings is that a corrective redistribution of income in favor of the working class is urgently needed for China to boost consumption spending, make economic growth rely less on investment or trade, and help mitigate worsening global imbalances.

DOI10.1016/j.iref.2018.12.004
Indexed BySSCI
Language英语
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Cited Times [WOS]:1   [WOS Record]     [Related Records in WOS]
Document TypeConference paper
CollectionDEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
AffiliationFaculty of Business Administration, University of Macau
First Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Xinhua Gu,Pui Sun Tam,Guoqiang Li,et al. An alternative explanation for high saving in China: Rising inequality[C],2018.
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