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How Much Will China Save? Projecting China's National Savings Through 2040*
Author(s) -
Li Shiyu,
Kotlikoff Laurence J.,
Lin Shuanglin,
Woo Wing Thye,
Jiang Yunyun
Publication year - 2016
Publication title -
asian economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.345
H-Index - 28
eISSN - 1467-8381
pISSN - 1351-3958
DOI - 10.1111/asej.12092
Subject(s) - china , national savings , economics , consumption (sociology) , national accounts , national wealth , measures of national income and output , agricultural economics , macroeconomics , finance , geography , social science , archaeology , sociology
This paper projects China's national savings through 2040 based on China's national account data, demographic data, and data on rural and urban life‐cycle income and consumption. Our baseline projections show that China's national saving in 2040 will be 16 times the current national saving. The annual growth rate of wealth will decline from 16.3 percent in 2012 to 9.5 percent in 2040. Lowering the growth rate of wealth accumulation to the current rate of return to wealth increases consumption through 2040; lowering the growth rate of wealth further may increase consumption more in the short run, but less in the long run.