China's savings too high

China's savings too high - bank adviser
Apr 11, 2009 19:03
BITTERSWEET Points: Join Date: Sep 25, 2008 Status: offline	By Maggie Zhang \| 2009-4-11 \| NEWSPAPER EDITION THE financial crisis has alerted China to the need to improve its economic structure by trimming savings and boosting consumption, a central bank adviser said in Shanghai yesterday. "We can't sustain our growth with the current model of overly high savings and overly low consumption," Fan Gang, who sits on the People's Bank of China's monetary policy advisory committee, said at the Hexun Foreign Banks Forum in the city. China's total savings accounted for about 50 percent of the economy, which is too high, he said. The savings ratio is expected to decrease in years as the central government is taking measures to reform the fiscal system and the social welfare system to help trim savings. Fan said a 40-percent savings-to-economy ratio is healthy and balanced. "The balance between consumption and savings is a key issue for China's economic development in the long run," he said. The United States model showed that too low a savings ratio can cause headaches but China's overly high savings are also a problem for the country's long-term economic development, he said. China's financial industry has weathered the crisis so far but the slump in trade and the contraction of overseas investment showed the importance of cutting reliance on external demand and boosting domestic consumption.

China's savings too high - bank adviser

Apr 11, 2009 19:03

BITTERSWEET
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Join Date: Sep 25, 2008
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By Maggie Zhang | 2009-4-11 | NEWSPAPER EDITION

THE financial crisis has alerted China to the need to improve its economic structure by trimming savings and boosting consumption, a central bank adviser said in Shanghai yesterday.

"We can't sustain our growth with the current model of overly high savings and overly low consumption," Fan Gang, who sits on the People's Bank of China's monetary policy advisory committee, said at the Hexun Foreign Banks Forum in the city.

China's total savings accounted for about 50 percent of the economy, which is too high, he said. The savings ratio is expected to decrease in years as the central government is taking measures to reform the fiscal system and the social welfare system to help trim savings.

Fan said a 40-percent savings-to-economy ratio is healthy and balanced.

"The balance between consumption and savings is a key issue for China's economic development in the long run," he said.

The United States model showed that too low a savings ratio can cause headaches but China's overly high savings are also a problem for the country's long-term economic development, he said.

China's financial industry has weathered the crisis so far but the slump in trade and the contraction of overseas investment showed the importance of cutting reliance on external demand and boosting domestic consumption.

Apr 11, 2009 22:12	#1
GARYKINKADE Points: Join Date: Jan 8, 2008 Status: Offline	Damned if you do and damned if you don't. Hmmmm....

Apr 12, 2009 19:56

COOLSPRINGS
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Join Date: May 19, 2008
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China would be modernized if 50% savings can be chanelled to all kinds of family insurance, investment, tranvelling. Acturally big cities are realizing such transformation because my friends in Shanhai have owned condos, cars and travelled abroad-Euro, Austrialia, Africa, Cuba, other Aisan countries (I think Visa is not required in Cuba for PRC citizens) where PRC has travelling treaty with. The only advantage they don't have over me here is spacial enviroment!

May 2, 2009 05:51	#3
LANCENICOLASE Points: Join Date: May 2, 2009 Status: Offline	China’s financial industry has weathered the crisis so far but the slump in trade and the contraction of overseas investment showed the importance of cutting reliance on external demand and boosting domestic consumption. _______________________ www.independentinvestor.co.uk

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