(Download) "Does China Save and Invest Too Much?" by The Cato Journal # eBook PDF Kindle ePub Free
eBook details
- Title: Does China Save and Invest Too Much?
- Author : The Cato Journal
- Release Date : January 22, 2006
- Genre: Politics & Current Events,Books,
- Pages : * pages
- Size : 231 KB
Description
China's current saving and investment levels are extraordinary--both in terms of its own history, but also by comparison with the current and historical experience of high-saving countries like Japan. The International Monetary Fund's 2005 World Economic Outlook places China's gross saving at 50 percent of GDP with gross capital formation, not far behind, at 45 percent of GDP (IMF 2005: 96-97). High levels of saving and investment are usually seen as a good thing. For a developing economy, such as China, a high level of domestic saving and investment means that residents are forgoing current consumption in order to add to the capital stock, thereby increasing growth and labor productivity. For a developed economy like the United States, while absolute levels of saving and investment may not match those in developing economies, a high level of saving and investment would mean that residents are financing most of the increase in the capital stock and are thereby positioning themselves to benefit from future returns earned by the enlarged capital stock. The reality for the United States over the past half-decade--a sharp rise in imports of foreign savings--means that returns from growth in the capital stock are increasingly earmarked for payment to foreign investors.