How Will China's Saving-Investment Balance Evolve?

This paper investigates how China's saving, investment, and saving-investment balance will evolve in the decades ahead. Household saving in China is relatively high compared with OECD countries. However, much of China's high economywide saving, and the difference between China and other co...

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Main Author:	Kuijs, Louis
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	BANK LOANS CORPORATE GOVERNANCE DISPOSABLE INCOME DIVIDEND POLICIES DIVIDENDS DOMESTIC SAVING DOMESTIC SAVINGS ECONOMIC GROWTH ECONOMIC OUTLOOK ECONOMIC STRUCTURE ECONOMIC THEORY ELASTICITY EXCHANGE RATES EXPORTS EXTERNAL FINANCING FINANCIAL ASSETS FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTOR FISCAL POLICY FIXED CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT GDP GDP PER CAPITA GROSS FIXED CAPITAL FORMATION HEALTH INSURANCE INTENSIVE GROWTH INTEREST RATE INTEREST RATES INVESTMENT CLIMATE INVESTMENT GROWTH INVESTMENT PRIORITIES INVESTMENT RATE MONETARY POLICY OPEN ECONOMY PER CAPITA INCOME PER CAPITA INCOMES PRICE INCREASES PRODUCTION FUNCTION PRODUCTIVITY GROWTH PROFITABILITY PUBLIC INVESTMENT RATE OF RETURN RATES OF RETURN REAL GDP REAL INTEREST RATE RESIDENTIAL REAL ESTATE RETAINED EARNINGS SAVINGS SAVINGS DEPOSITS SMOOTHING CONSUMPTION STRUCTURAL CHANGE TOTAL FACTOR PRODUCTIVITY VALUE ADDED WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2006/07/6887581/chinas-saving-investment-balance-evolve http://hdl.handle.net/10986/8419

id	okr-10986-8419
recordtype	oai_dc
spelling	okr-10986-84192021-04-23T14:02:41Z How Will China's Saving-Investment Balance Evolve? Kuijs, Louis BANK LOANS CORPORATE GOVERNANCE DISPOSABLE INCOME DIVIDEND POLICIES DIVIDENDS DOMESTIC SAVING DOMESTIC SAVINGS ECONOMIC GROWTH ECONOMIC OUTLOOK ECONOMIC STRUCTURE ECONOMIC THEORY ELASTICITY EXCHANGE RATES EXPORTS EXTERNAL FINANCING FINANCIAL ASSETS FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTOR FISCAL POLICY FIXED CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT GDP GDP PER CAPITA GROSS FIXED CAPITAL FORMATION HEALTH INSURANCE INTENSIVE GROWTH INTEREST RATE INTEREST RATES INVESTMENT CLIMATE INVESTMENT GROWTH INVESTMENT PRIORITIES INVESTMENT RATE MONETARY POLICY OPEN ECONOMY PER CAPITA INCOME PER CAPITA INCOMES PRICE INCREASES PRODUCTION FUNCTION PRODUCTIVITY GROWTH PROFITABILITY PUBLIC INVESTMENT RATE OF RETURN RATES OF RETURN REAL GDP REAL INTEREST RATE RESIDENTIAL REAL ESTATE RETAINED EARNINGS SAVINGS SAVINGS DEPOSITS SMOOTHING CONSUMPTION STRUCTURAL CHANGE TOTAL FACTOR PRODUCTIVITY VALUE ADDED WEALTH This paper investigates how China's saving, investment, and saving-investment balance will evolve in the decades ahead. Household saving in China is relatively high compared with OECD countries. However, much of China's high economywide saving, and the difference between China and other countries, are due to unusually high enterprise and government saving. Moreover, cross-country empirical analysis shows that economywide saving and investment in China are higher than what would be expected, even adjusting for differences in economic structure. Combined, these findings suggest that much of China's high saving is the result of policies particular to China. Looking ahead, the econometric results suggest that purely on the basis of projected structural developments-including development, changes in economic structure, urbanization, and demographics-saving and investment would both decline only mildly in the coming two decades, with ambiguous impact on the current account surplus. However, the potential effect on saving, investment, and the saving-investment balance of several policy adjustments could be large. Several of these policies are identified and their likely impact assessed and quantified. This exercise suggests that rebalancing along these lines should reduce both saving and the current account surplus over time, although the surplus is unlikely to turn into a deficit soon. 2012-06-19T15:33:10Z 2012-06-19T15:33:10Z 2006-07 http://documents.worldbank.org/curated/en/2006/07/6887581/chinas-saving-investment-balance-evolve http://hdl.handle.net/10986/8419 English Policy Research Working Paper; No. 3958 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific China
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	BANK LOANS CORPORATE GOVERNANCE DISPOSABLE INCOME DIVIDEND POLICIES DIVIDENDS DOMESTIC SAVING DOMESTIC SAVINGS ECONOMIC GROWTH ECONOMIC OUTLOOK ECONOMIC STRUCTURE ECONOMIC THEORY ELASTICITY EXCHANGE RATES EXPORTS EXTERNAL FINANCING FINANCIAL ASSETS FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTOR FISCAL POLICY FIXED CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT GDP GDP PER CAPITA GROSS FIXED CAPITAL FORMATION HEALTH INSURANCE INTENSIVE GROWTH INTEREST RATE INTEREST RATES INVESTMENT CLIMATE INVESTMENT GROWTH INVESTMENT PRIORITIES INVESTMENT RATE MONETARY POLICY OPEN ECONOMY PER CAPITA INCOME PER CAPITA INCOMES PRICE INCREASES PRODUCTION FUNCTION PRODUCTIVITY GROWTH PROFITABILITY PUBLIC INVESTMENT RATE OF RETURN RATES OF RETURN REAL GDP REAL INTEREST RATE RESIDENTIAL REAL ESTATE RETAINED EARNINGS SAVINGS SAVINGS DEPOSITS SMOOTHING CONSUMPTION STRUCTURAL CHANGE TOTAL FACTOR PRODUCTIVITY VALUE ADDED WEALTH
spellingShingle	BANK LOANS CORPORATE GOVERNANCE DISPOSABLE INCOME DIVIDEND POLICIES DIVIDENDS DOMESTIC SAVING DOMESTIC SAVINGS ECONOMIC GROWTH ECONOMIC OUTLOOK ECONOMIC STRUCTURE ECONOMIC THEORY ELASTICITY EXCHANGE RATES EXPORTS EXTERNAL FINANCING FINANCIAL ASSETS FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTOR FISCAL POLICY FIXED CAPITAL FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT GDP GDP PER CAPITA GROSS FIXED CAPITAL FORMATION HEALTH INSURANCE INTENSIVE GROWTH INTEREST RATE INTEREST RATES INVESTMENT CLIMATE INVESTMENT GROWTH INVESTMENT PRIORITIES INVESTMENT RATE MONETARY POLICY OPEN ECONOMY PER CAPITA INCOME PER CAPITA INCOMES PRICE INCREASES PRODUCTION FUNCTION PRODUCTIVITY GROWTH PROFITABILITY PUBLIC INVESTMENT RATE OF RETURN RATES OF RETURN REAL GDP REAL INTEREST RATE RESIDENTIAL REAL ESTATE RETAINED EARNINGS SAVINGS SAVINGS DEPOSITS SMOOTHING CONSUMPTION STRUCTURAL CHANGE TOTAL FACTOR PRODUCTIVITY VALUE ADDED WEALTH Kuijs, Louis How Will China's Saving-Investment Balance Evolve?
geographic_facet	East Asia and Pacific China
relation	Policy Research Working Paper; No. 3958
description	This paper investigates how China's saving, investment, and saving-investment balance will evolve in the decades ahead. Household saving in China is relatively high compared with OECD countries. However, much of China's high economywide saving, and the difference between China and other countries, are due to unusually high enterprise and government saving. Moreover, cross-country empirical analysis shows that economywide saving and investment in China are higher than what would be expected, even adjusting for differences in economic structure. Combined, these findings suggest that much of China's high saving is the result of policies particular to China. Looking ahead, the econometric results suggest that purely on the basis of projected structural developments-including development, changes in economic structure, urbanization, and demographics-saving and investment would both decline only mildly in the coming two decades, with ambiguous impact on the current account surplus. However, the potential effect on saving, investment, and the saving-investment balance of several policy adjustments could be large. Several of these policies are identified and their likely impact assessed and quantified. This exercise suggests that rebalancing along these lines should reduce both saving and the current account surplus over time, although the surplus is unlikely to turn into a deficit soon.
format	Publications & Research :: Policy Research Working Paper
author	Kuijs, Louis
author_facet	Kuijs, Louis
author_sort	Kuijs, Louis
title	How Will China's Saving-Investment Balance Evolve?
title_short	How Will China's Saving-Investment Balance Evolve?
title_full	How Will China's Saving-Investment Balance Evolve?
title_fullStr	How Will China's Saving-Investment Balance Evolve?
title_full_unstemmed	How Will China's Saving-Investment Balance Evolve?
title_sort	how will china's saving-investment balance evolve?
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2006/07/6887581/chinas-saving-investment-balance-evolve http://hdl.handle.net/10986/8419
_version_	1764406218797875200

How Will China's Saving-Investment Balance Evolve?

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