The Reasons And Countermeasures Of The High Precautionary Savings Rate Of Chinese Farmers

The continuous growth of China’s household savings has become the focus of attentionof the community. Significant household savings in China is characterized by a high savingsrate, and low sensitivity to changes in the actual interest rate, precautionary savings thansignificant. We found that in recent years, the growth rate of rural residents’ savings haveconsistently been higher than the growth rate of its gross domestic product by observing andsavings growth rate is much higher than the economic growth rate. Higher savings canprovide adequate sources of funding for the development of China’s economy, promoteinvestment, and promote economic growth in the short term, to become an important factor tosupport rapid economic growth, but too high savings rate will inevitably associate withconsumption insufficiency, from the long-term has seen high savings rate is not conducive tosustained high economic growth. And these spare funds for the development of the country asa whole are also a waste, how to transfer these funds to economic development is a verycritical issue.Excessive growth of household savings impact on macroeconomic performance tosome extent for the accumulation and consumption imbalance. The consumer is the final partof the production process, by the value of goods and utility finally achieved, all products mustenter the consumer, be considered the end of the production process. The process of economicgrowth, if it is overly dependent on investment and exports to drive the economy can achievea total balance of supply and demand in the short term and the long term, however, if the totalsupply growth is faster than the growth of aggregate demand，overproduction will beexacerbated macroeconomic eventually imbalance. In the case of China’s current productionof relative surplus savings rising consumption, investment rate is too high, is not conducive toshort-term macroeconomic equilibrium and long-term economic stability and growth.Chinese household savings for many reasons, deposit interest income is not the mainreason, residents’ savings sensitivity to changes in the effective interest rate is low, mainly dueto unpredictable expenses, to be paid in the future, in order to be paid in the future a variety ofunpredictable the expenses must have enough wealth, a savings motivation precautionarysavings. China’s savings groups are primarily focused on farmers, precautionary savingsaccount for a large proportion of the savings of the farmers, which, to study China’s savingsmainly on the study of Chinese farmers through research, and to study the savings of Chinesefarmers mainly on the study of farmers’ precautionary savings. GDP growth in1978-2006of57.85times,26.85times the growth in the per capita net income of rural residents, ruralresidents over the same period, however, savings deposits increased more than340times, farmore than the growth rate of per capita net income of rural residents. As we all know, too highsavings rate in rural areas is bound to affect the funding of rural agriculture, thus affecting theeconomic development of rural areas, even the development of the national economy as awhole. Therefore, the crack of the rural high savings motivation seeking responsecorrespondingly, rural savings into immediate consumption in order to boost economic growth problems to be solved.