A wrong number of Deposits/GDP in the speech of Governor of Central Bank

468259058

468259058

GDP =
Saving + consumption (Household)

+ saving + consumption (enterprises)

+ saving + consumption (government)


++++++++++
here saving includes the investment and capital formation.


Supposed One company paid X guy RMB 14,000 a month.

Goverment get 5,000 by taxes, compulsory insurance.

X guy get gross income: 9,000.

In one month, X guy buys food, pays transportion fee, pays rentals, etc, with RMB 3,000.

He pays the interests of house loans with 3,000, He invest stocks with 2,000, He deposite 1,000 in bank.

That is to say personal saving is 3,000 + 2,000 + 1,000 = 6,000.

The personal saving rate is 6,000/9,000 = 0.6.
+++++++++++

right?

468259058

So "Chuxu" in the speech of Zhou Xiaochuan is not deposits in Banks but "Saving" in GDP calculation.

Here "Chuxu" is only a economic term.

468259058

Chinese household saving rate were going down.
enterprises' saving rate and Government's saving rate were going up in the past 10 years.

That is to say, in general, invidual wealth to GDP rate were going down and government wealth to GDP rate were going up.

the wealth of most ordinary Chinese to GDP rate were going down and the wealth of  government officials, entrepreneures,  and capital investors were going up.

++++++++
right?

++++++++
If this conclusion is right, if China is going along this track in future, eventually China would suffer a huge political unstability, though government try to keep the situation stable.  Because this transferring is not from honest hard works, the investment of intelligence, but privatization of government wealth to some Chinese, deduction of social welfare to most of odinray Chinese, changes of government policies.

If one guy predicted that China would go like this, he probably would secure his safety, throwing away Chinese citizenship, transferring part of wealth out of China, though still earning profits through this paradise of speculators.

[ Last edited by 468259058 at 2011-5-22 11:21 AM ]

468259058

Zhou Xiaochuan, the governor of Central bank said
China's high saving ---
lead to --- high investment
lead to --- asset bubbles and overproduction

Right??

+++++++++++
No.
1. It is from too much currency supply.

Governor of Central bank shouldn't stop the rising bank interests with the excuse of "high savings".

Though rising bank interesting would bring huge bad loans to Chinese banks. Because too many worst investment financed by Chinese banks took place in the past 2 years.

2. individual high saving is caused by the government policy "high tax and low social welfare."
Enterpises' high saving is from the monopoly of government administration. Because land, mines, and other resources are controled by government and central government-own companies. Private-own companies can only get high profits from housing market and other markets of speculation, like fruit, vegetable, and other food.

Overproduction is from loal government invested too much, for example the car projects around China.


++++++++++++++
source: h ttp://money.163.com/special/focus301/

468259058

In #20 post.
I agree with opinions of the journalist. He defends the benefits of ordinary Chinese.  Most ordinary Chinese have less than RMB 1 million. They have little of social wefare. And they have to leave most of their money in banks for potential emergency.

I disagree with Zhou Xiaochuan, the governor of Central bank of China. He defended the benefits of richest Chinese, the speculators. He tried to stop the rising bank interests.  The richest Chinese invested most of their money in housing market and other assets. They won't suffer from this round of inflation.
The government won't suffer from the huge loans which they invested in many projects with low profits in the past 2 years.
The banks won't suffer from the potential bad dets.
But ordinary Chinese suffers.

So, Zhou Xiaochuan represented the richest Chinese, represented speculators including foreign hedge funds, represented the government and the special class, government officials.

St_George

richest Chinese,

Worse than that some of them are taking their money and spending it abroad.

Which of course Western Capitalists have done for many years.