Just How Much Does China Save vs the Rest of World?

A key plank of China’s latest monetary stimulus was the scrapping of remaining interest rate caps on short-term deposits.

The liberalization of the interest rate regime should support China’s ambitions to get the yuan added to theInternational Monetary Fund’s pool of international reserve currencies. But the move also has implications for how China’s transformation away from an export and investment led economy to a consumption-led economy plays out.

Chinese households tend to save more cash than their spendthrift peers in the Western world, so potentially earning higher interest rates on their deposits should boost incomes and spending.

But how high is China’s gross savings rate? The World Bank defines it as gross national income less total consumption, plus net transfers so a broader gauge than just individuals by including both companies and the government.

Pretty high, according to data from the World Bank from 2013, the latest period for which data are available. Only Kuwait and Bermuda had higher rates as of 2013.


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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.