The Determinants Of Household Saving In China

Since30years of reform and opening up, as the rapid development of China’s economy,household savings balance has been in a high growth momentum, the position of saving in thenational economy keep rising. But at the same time, the problems that exist in are also obvious,especially the structural contradiction problems. In recent years, the proportion of domestic finalconsumption accounts for gross domestic product is less and less, the proportion of householdconsumption accounts for China’s final consumption is bigger, So the decrease of finalconsumption mainly because of the reduction of household consumption level, and with theimprovement of citizen’s income level, the decrease of citizen consumption rate reflected thatChina’s resident saving rate is increasing continually. It cannot be denied that high saving ratesprovided adequate financial resources for economic growth in China, become an important factorof supporting economy grow fast. However, normal operation of macro economy has been pressedto a certain extent by the huge household savings. High saving rates and low spending rates lead toweak domestic demand in China, to promote economic growth only can rely on investment andexports, but the long-term dependence on investment and exports is not conducive to our countryeconomy long-term stable development. The ultimate goal of economic development is tostimulate consumption, so translating China’s high household saving rate into consumption rate, itis important practical significance to transform the economic situation and develop abidinglyin ourcountry.High household saving rate leading to weak domestic demand in China is one of the importantproblems that hinder China’s economic development, how to reduce the rate of household saving isvery urgent. Therefore, combining with the actual situation of our country present stage, this paperdiscusses the influence factors of China’s residents savings in the theoretical and empirical aspects.The first part is the introduction, it introduces the background of topics and the purpose andsignificance of the topic, research at home and abroad, the research content and the basic method.Through the understanding of economic development at the present stage in China, concludes thatinsufficient domestic demand and weak consumer spending hampered the economic developmentof China a certain extent. And the cause of low level of consumption is mainly due to the highhousehold savings in China, calculated the intention and meaning of the article. The second part isthe theoretical basis, it introduced the basic concept of savings firstly, and then through combingthe theoretical knowledge for savings, learned the development process of savings theory nearly two hundred years. It provides a theoretical support for the selection of variables. The third part isthe problems of China’s household saving, combining with the current situation in our country andreferring to the actual data, founded the main problems of China’s household savings at the presentstage, which mainly include ultra high resident saving rate in China, uneven distribution betweendifferent income groups, uneven distribution between different age groups and saving-investmentratio imbalance of our country residents. The fourth part is the theory analysis of the influencefactors of China’s household savings, which mainly include the theory analysis of erest rates andhousehold savings, the relationship analysis of population structure and household savings, therelationship analysis of distribution of income and household savings, provided support for theselection of variables in the model. Then, this part analyzed the other influencing factors ofChina’s household savings. The fifth part is empirical analysis, through the above analysis, it cameup with a model framework conforming to the actual situation in our country and selected therelevant variables. Using the model combined with China’s data which from1983-2011, toresearch the influence factors of residents savings rate in China by empirical analysis. By returningall variables, results display that there is a co-integration relationship between variables. Themodel is corrected to avoid false regression, then to select the optimal model forms. Final resultsshow that income distribution affects China’s residents savings rate significantly. The fifth part iscountermeasures and suggestions. Aiming at the problem of China’s household savings at thepresent stage and according to main influence factors of China’s household savings which wasshowed by the article research results, this paper puts forward a series of reasonablecountermeasures and Suggestions.