📝China High Savings Rate to Bolster Consumption: ING

Increase consumer spending power. In the long term, this will primarily be done by maintaining a stable job market and encouraging higher wage growth. In the short term, tax rebates and subsidies can stimulate overall consumption or direct consumption toward specific sectors. For example, this year’s Two Sessions prioritised the “trade-in” theme, which could benefit spending on household appliances.

Reduce the structurally high savings rate. China’s savings rate is very high compared to many countries. According to OECD data, China’s savings rate was around 35% of disposable income, well above other major economies which were between 7-13%. Improving the social safety net and bolstering consumer confidence could free some of these savings up for consumption. - ING