Research On The Approach To Promoting The Savings Convert To Investment

The Capital is the source of economic growth. The amount of capital formation is mainly dependent on the level of savings, the scale and savings, and the efficiency of savings-investment transformation which is the most critical factor. According to the data of China Statistical Yearbook, the savings continues to increase, the rate of increase is far greater than the amount of investment, the savings investment gap is growing, a lot of money accumulated in the form of savings deposits stored in banks or other financial institutions, as a result, the bank liabilities increases, also leaded to high risk of financial investment. Therefore, the effectively of savings transformed to investment is quite important.In this paper, it uses two methods that is literature research and empirical research, its main structure is as follows:Firstly, it describes the current situation of savings investment transformation. This part will be departed to three parts. The first part uses the gap of savings investment to reflect the transformation, then added the rate of savings and efficiency of investment to describe transformation in micro-level; in the second part, it builds econometric model to measure the rate of transformation. Collecting 1978-2010 years with the savings and investment rates to establish ECM model and VAR model, adopting the variance decomposition and impulse response function to analyze the total transformation rate. Next, Select panel data which is a combination of every province savings and investment rates from 1993 to 2010, creates random parameter test model to analyze the transformation rate. In the third part, it based on the financial investment tools in financial markets, especially the details issuance of a bond market. Finally, we founded that the gap between savings and investment is growing lager, transformation rate is very low and being in an unbalanced situation among every areas, the financial investment tools and channels are single.Secondly, according to the currency, it will analyze the reasons of low transformation efficiency from four aspects which affect the transformation:consumption rate, the income structure, investment efficiency, the problems lies in the savings-investment in the conversion mechanism. This paper argues that the low MPC, high savings, unreasonable income distribution structure and unsound system in financial market lead to the low convert rate.Lastly, it puts forward efficient measures to promote savings transform to investment, which is the most important in the paper. Focusing on establish a domestic demand market which is based on consumption, broaden the investment channels, increase private investment, speed up the savings of regional mobility, ease savings distribution in unbalance, And make use of technological innovation, adjust the industrial structure, consequently, increase efficiency of transformation and promote the economic growth.