This post was edited by LOLL at 2012-11-28 17:54|
While the steams of investment-led and export-led economic development model have deteriorated in recent years, the transformation from investment-led and export-led economic development model to consumption-led model seems inevitable and sole way to fufill the task of doubling people's income by 2020 from the 2010 level, which is well stipulated in the report of former CPC general secretary Hu on the opening ceremony of the 18th national congress of the communist party of China.
According to some official statistics,China's aggregate household savings have surpassed 18 trillion yuan(2.86 trillion USD)by the year of 2009,with per capita savings of 13000 yuan.An international monetary fund report claims that China's household savings rate have been fluctuated around 50% of GDP since the significant economic increase in the past decades.The national bureau of statistics declared that the household savings are at 52% of GDP,compared with the world average which is at 19.7%.
Saving is not a curse thing in itself, as was seen after the outbreak of debt crisis in America and some european countries due to over-borrowing,over-consumption and low saving ratio. Maintaining a relatively high standard of domestic saving rate in the duration of early period of economic development is extremly necessary, particularly in China for the lack of sufficient funds for infrastructural construction and investment, further more, it can help avoid the situation of excessively borrowing for its fund-thirsty economic development.
Except the traddition of Chinese hosehold frugality as one of the reason that cause high saving ratio, the abscense of a well-off social security system including pension, education, goverment subsidized housing and health care is also a major push for people's strong willingness to bank their money as the insecure future.
On the one hand, China's inceptive export-led model and investment-led model have created massive job opportunities and social wealth, on the other hand, its long reliance on export-led model and investment-led model have enlarged trade surplus and foreign reserves, which have triggered a controversy about whether China's huge trade surplus and foreign reserves are the reasons for global imbalances and partialy responsible for the current debt crisis or not.
In order to lower the trade surplus, Chinese goverment has adopted serveral measures such as cutting down importing tariffs, withdrawing tax rebates for some export products and gradually appreciating RMB. But the authorities of China still need to strengthen their efforts to reduce the high saving ratio and extricate itself from the reliance on export and investment-led model to reconfigure a consumption-led economy.
As the export and investment-led model have been destinied to loose their driving force to stimulate china's economy, the top priority of the current Chinese government is to expand the domestic demand and overall consumption so as to remain a properly rapid economic growth and to fullfill the objectives of building a moderately prosperous society by 2020. An undue high saving rate and households' reluctance to
spend will ultimately cause overproduction which China has suffered in 2008.
The authorities of Chinese government should fasten the reform of distribution system and tilt the leverage of national distribution to the people, particularly those emerging middle-class and poor living under the poverty, with such measures, the capability of China's consumption will be augmented. simultaneously, sets of pragmatic and systematic policies about imporving the agregate social security should be executed, with the purpose to lessen peoples' tension and sense of insecure about their prospective finance and heighten people's confidence to expand their expenditure.
hopefully, the upcoming program of income distribution reform would be capable of solving those conundrums once and for all.