The Reinterpretation of China’s High Savings Rate and Its Changing Trend

This paper evaluates the misinterpretation of savings rate by micro thinking from the perspective of the connotation of savings.It points out that there is no causal relation between savings rate and consumption rate of an economy,and both of them are determined by production structure.Different from the view of mainstream economics that saving determines investment,this paper demonstrates the logic that investment determines saving from the perspective of financing based on the production process,and shows that saving is the consequence of investment rather than the cause.Combined with the practice of China’s economy development,this paper further indicates that China’s high savings rate is the result of excessive investment scale and high proportion of capital goods output in GDP under the extensive economic growth mode.Under the guidance of high-quality development,China’s economic growth will transform from investment driven to technology innovation-driven,and the investment rate as well as the savings rate will tend to decline.However,the production structure will be further optimized,thus promoting the improvement of consumption level and quality.