Chinese earn more, save more - Zhang Jun

Zhang Jun

The income of most Chinese citizens has gone up much during the past decade, but most of the extra money is not being spend but saved, says Fudan economics professor Zhang Jun at NPR.

"What we see in the last 10 years is a declining share of consumption spending relative to GDP."
And when it comes to the national savings — which include savings by businesses and governments — according to Chinese figures in 2007, China saved the equivalent of 49.9 percent of its GDP. This has contributed to huge global trade imbalances: Chinese savings have in effect been funding American spending. So, according to Zhang, stimulating Chinese consumption can only have a limited effect."
In the short run, it doesn't solve the problem of the global imbalance," he says. "We could say to the U.S. side that the U.S. needs to save more, so that they could ease the problem of the global imbalance."

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Professor Zhang Jun is also a speaker at the China Speakers Bureau. When you want him to share his insights at your conference, do let us know.

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