President Zhou Xiaochuan of People’s Bank of China said in Global Think Tank Summit that China’s best option in structural adjustment is to expand the consumption, which would stimulate the domestic demand directly and reduce the general saving rate.
Zhou Xiaochuan said that a very obvious irrationality had shown in the imbalance of global economy, which was countries with relatively low-income had a high saving rate, while wealthy people in developed countries were with over-consumption. China’s saving rate was too high, while that in the US was too low, and the two countries should both carry out reforms. China was ready to move in this direction, at the same time, we would not exaggerate the role of two countries. The ratio of China’s household savings in GDP was actually quite stable, which remained at about 20% from 1992 to 2007; the ratio of enterprise savings in GDP increased from 11.3% in 1992 to 22.9% in 2007, increasing by 50%; meanwhile, the government savings (i.e. the public sector savings) increased from 4.4% in 1992 to 8.1% in 2007, also up by nearly 50%. The high profit of corporate sector was caused by equity distribution structure, and the majority of employees only acquired small profit from the company. To solve this problem, the government must create conditions to allow more people owning property revenue. The investment field in China with considerable potential was the urbanization development, which laid foundation for population migration, consumer conditions and development of the service industry in the future. China’s saving rate was high, and there might be some surplus savings, which was hoped to flow to developing countries. This requires the support from international financial organization system and the international monetary system, so that the global productivity and income distribution could be improved, bringing more universal and green global growth.