A Study On The Differences Of Savings Of Rural And Urban Residents In Jiangsu Province

Savings of the residents, a significant part of the overall savings of the society, plays an important role in boosting the economic growth. Since the reform and opening-up, the income of the residents of China has been increasing steadily and savings of the residents has also maintained an enormous growth rate with its annual balance by the end of the year growing rapidly. The large amount of savings of the residents exerts great pressure on the normal operation of the macro economy of our country and at the same time increases the risk exposed to financial institutions. Therefore, a number of proactive fiscal and monetary policies have been put forward by the government since 1996 in a bid to simulate consumption and investment, expand domestic demand and provide alternative investment channels besides bank deposits, but the results have been far from satisfactory.Savings of the residents of Jiangsu Province has been growing at a significantly high speed, but it fails to transform into effective social investment and does not play its due role of helping maintain the sustainable growth of national economy. Moreover, there exist great differences between the amount of savings of urban and rural residents as a whole and the savings of the individual resident. Which factors result in such significant differences? What are the implications of such differences? And will such differences influence the policies of the government as to creating alternatives investment opportunities to channel the idle funds of the society? All these questions remain an imminent task confronted by the researchers and the policy-makers.On the basis of the research that has been done in this field before, this paper follows the paradigm of differentiating the savings of the urban residents from that of the rural residents. What is worthy mentioning is that this paper combines the savings aimed at guarding against the uncertainties and precautionary savings and makes specific analysis of the differences of the whole society and individual resident in terms of savings. Despite the great gap existing in the income of the urban residents and that of their rural counterparts, they all tend to keep a conservative consuming habit and have high savings tendency in the light of the great uncertainties in the future.This paper consists of five chapters and conducts a thorough and complete analysis of the savings of the urban and rural residents. The first chapter is an introduction. The second and third chapters are the theoretical background of the research to be made and the actual practice respectively. The fourth chapter, also the core of this paper, focuses on the factors determining the differences of the savings of the overall society and the individual resident. The fifth chapter makes a summarization of the paper and advances suggestions regarding channeling savings to other effective investment sources.