China's Economic Growth Optimal Savings Rate Study

With China’s rapid economic growth, the savings rate is also going to reach a very high level. Savings have played an important role as an important source of capital for economic growth, but excess savings will lead to negative impact on economic growth. As for what saving is the optimal saving rate to the economic growth, Solo‐Swan made such a definition: the golden rule level of capital is the steady‐state when the capital stock meet maximum of per capita consumption. Such a conclusion can be made：The optimal savings rate is the savings meet the golden rule level of capital。Article embarks from the capital gold law combining the theory of excess savings and the theory of dynamic efficiency to analysis optimal savings. The article gave the calculation of optimal saving rate combined with China’s potential growth, and then carried on the empirical analysis based on the forecast of economic growth and the relationship between the savings rate, and formed the following conclusions:1. The criterion of optimal saving rate. First using the economic theory of dynamic efficiency to determine whether there is a dynamic Inefficiency in the economy, the results show that the Chinese economy is dynamic, namely there is excess savings. Combined with excess savings theory analysis, put forward the potential growth is the standard to judgment the optimal saving rate and whether China’s savings rate is too high. The optimal saving rate of China’s economy will be the savings rate conforms to the Chinese economy’s potential growth rate.2. The calculation of the optimal saving rate. There are many methods to determine the optimal saving rate, the article by Harold‐Thomas model combined with the result of measure for China’s potential growth rate is36.2%.，and the result of Solo‐swan model is46.4%。The optimal saving rate significantly lowers than the real one. Based on this two kinds of calculation results, the paper puts forward the Chinese economy optimal saving rate range。3. Put forward policy Suggestions on the basis of empirical analysis.