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Opinion
China’s high household savings reflect old values and new anxieties
Economic uncertainties strengthen the deep cultural instinct for thrift. Policies must address the anxieties that make saving feel necessary
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Lijia Zhang is a rocket-factory worker turned social commentator, and the author of a novel, Lotus.
My grandmother kept her banknotes under the mattress. Even after savings accounts became common and the money my siblings and I gave her began to accumulate, she still preferred to hide cash away at home. She loved saving and hated spending. I thought of her when China’s leaders again emphasised the need to boost domestic consumption at this year’s “two sessions” meetings.
With exports facing geopolitical headwinds and the property sector struggling, policymakers hope households will become a stronger engine of economic growth. Yet persuading Chinese families to loosen their purse strings is proving harder than expected.
Economists often explain China’s weak consumption through structural factors. Household consumption accounts for less than 40 per cent of gross domestic product, compared with nearly 70 per cent in the United States. High housing prices, rising medical costs, income inequality and a limited social welfare system all encourage households to save rather than spend.
These explanations are valid. But they overlook China’s deep cultural instinct for thrift. For many families, saving is not simply an economic decision. It is a moral habit shaped by history.
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