Comparable Household Saving Rates for China and the United States

Abstract

This paper focuses on how the household saving rate should be measured. The current method used in China to measure the saving rate is compared with that used in the U.S. Significant differences in concept and scope are discovered. Using these differences as a basis, we make relevant adjustments to the official measurement and recalculate the household saving rates of the two countries on a comparative scale. Our results show that the average of the Chinese household saving rate during the 1992-2004 period falls from 29.4 to 22.9 percent, and is lower than 20 percent in 2000, 2001, and 2003. The gap between China's household saving rate and that of the U.S. narrows by 8.6 percent on average and the adjusted difference is merely 17.5 percent on a comparable scale. It is therefore reasonable to conclude that the difference between the household saving rates of these two countries is in fact much smaller than is often suggested. Our study also shows that the household saving rates of these two countries are experiencing the same decreasing trend, but that both have increased slightly since 2002. Copyright 2008 The Authors. Journal compilation 2008 International Association for Research in Income and Wealth Published by Blackwell Publishing.

Family Finances in Urban China: Evidence from a National Survey

“…The overall average of annual expenses was $5,100 and the overall average of annual after-tax income was twice as much. This indicates a 50% saving rate, which is about twice as high as what was found in Wang, Cai, and Zhang (2004) and Qin and Ren (2008). The high saving rate is consistent with the Chinese culture of being thrift, conservative, and taking a long range view.…”

Effects of Age on Saving Motives of Chinese Urban Consumers

“…8% in 1990to 22.4% in 2008(Chamon and Prasad 2010. After adjusting for differences in calculating household saving rates between the United States and China, Qin and Ren (2008) found the average Chinese household saving rate between 1992 and 2004 was 22.9%, more than four times the 5.4% average American household saving rate during the same period. At a macro level, high savings rates provide the financial capital needed to build infrastructure and can improve broad financial and social stability.…”

Home Production and China's Hidden Consumption

“…The main implication of this paper is that non-market consumption is quantitatively significant for the Chinese economy, and neglecting it would miss a critical aspect of the economics of Chinese households. One important avenue for further research is accounting for non-market consumption in macroeconomic studies on consumption, saving, and the imbalances of the Chinese economy (see, e.g., Modigliani and Cao, 2004;Qin and Ren, 2008;Guo and N'Diaye, 2010;Xu et al, 2017).…”