High Savings Rate Hinder Economics?
China’s national savings rate has exceeded 50%, but was
considered to be one of the reasons for underpowered domestic consumption.
Some so-called experts said, making people dare to consume
and consume actively could accelerate progress out of
an economic recession and promote economic restructuring.
However, economists said that the so-called economic reform
results in China, were all looted away by the Chinese Communist Party (CCP) privileged interest groups.
To promote economic restructuring, it should not start from
the citizens, but the CCP privileged class.
On 21st November, People’s Daily published
an article pointing out that
China is facing the dual challenges of the international
financial crisis and the adjustment of economic structure,
boosting domestic demand and expanding consumption have
become important means to promote economic restructuring.
The report referred data from the International
Monetary Fund, saying in the early 1990s,
China’s household savings accounted for more than 35%
of the gross domestic product.
In 2005, the Chinese savings rate was up to 51%,
while the global average savings rate was only 19.7%.
In 2009, China’s household savings rate was 52%,
and the savings balance exceeded 18 trillion Yen;
the savings rate ranked first in the world,
and per capita savings was more than 10,000 Yen.
However, while China’s national savings rate climbed,
consumers』 willingness to spend is on the wane.
In early 2011, the central bank published
a depositors survey report,
which showed that up to 85.8% of urban residents
tended to save and only 14.2% tended to spend more.
Lawyer Li Tiantian in China pointed out most people tend to
save money, which only shows that national welfare is too low,
people feel insecure in life, and a lot of people could even
afford a house though they live frugally for a lifetime.
Li Tiantian: “The prices are so high, and houses are so
expensive, the CCP does not offer a pension guarantee,
so people dare not spend their money,
even if saving for a lifetime.
For the seniors, how dare they spend money?
There is no government aid medical insurance,
no guaranteed pension, so many things have no guarantee.
So how can people spend the money they earned?”
The report also cited the analysis of Wu Jinglian from the
PRC’s State Council Development Research Center, and
pointed out the imbalance of excessive national savings
and lack of consumption hinder China’s economic growth.
Experts say, it should gradually reduce the high savings rate,
allow and encourage people to spend and actively consume,
thus speeding up China』s turn-around out of economic
recession, and promoting economic restructuring.
However, Professor Xie Tian from the Business School at the
University of South Carolina-Aiken pointed out that the
results of the so-called economic reforms in China have been
all looted away by the CCP privileged interest groups, so the public cannot afford to consume.
Professor Xie Tian: “basically, these experts are speaking
unconscionably, hoping that the people dare consume and actively spend.
If you are also at the average person’s wage level,
seeing that house prices are so high,
plus medical insurance and education costs,
would you consume?
No. He must be standing for the interest group or be gaining
some benefits from them, allowing him to speak nonsense.”
Xie Tian said that the Chinese have frugal habits, and the
savings rate in Asian countries was significantly higher than those in the West.
But China’s savings rate is as high as 52%,
which is completely the result of malformed CCP policy making.
Xie Tian: “Why do Chinese people want to save
so much money?
Because they are afraid, they have a strong sense of
uncertainty about their future.
They do not know what their future will be like.
Inflation in China is so serious, so people had
to save for a house, or to prepare for education, health care, and retirement.”
Additionally, Xie Tian, pointed out that to accelerate
China’s turn-around out of economic recession and
to promote economic restructuring, it should not start
from the citizens, but should begin with the Communist authorities.
Xie Tian: “Firstly, the Chinese government should think of
ways for the capital return to knock down inflation in China.
Secondly, the corrupted CCP officials should return
the money they steal from the Chinese people.
Then the Chinese would have money to spend.
Now China is rich but the people are poor.
The treasures were taken away by the country,
or actually by the CCP privileged class.”
At the end of August, the PRC State Council economist,
Li Zuojun said, in around the year 2013,
China may have an outbreak of an economic crisis,
which will lead to social problems.
The outbreak of current accumulated social conflicts is
a precursor of an imminent storm.