Cultural Influence on China's Household Saving

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Zhang, Christabel ORCID: 0000-0001-5098-4587 (2015) Cultural Influence on China's Household Saving. PhD thesis, Federation University Australia.


The recession following the 2008 Global Financial Crisis highlighted the problem of deficient household saving and imprudent consumer credit. Studies of selected economies reveal that household saving tends to decline as economies move to higher stages of development. Following rapid economic growth, China’s household saving, possibly due to the influence of traditional culture, has remained high by international standards while consumer credit levels are low. This significant phenomenon has prompted the question of what this development trajectory may become as China proceeds to higher income levels. Whereas the economic, social and financial development factors related to household saving and development have been well researched, from the perspective of this investigation, there are missing ‘cultural values’ in the analysis. Consequently, the Institutional Economics concept of ‘culture as a value’ provides the basis for this thesis into the influence of culture on China’s household saving and its effects. By extending Keynes’s General Theory in relation to saving, and incorporating studies from both the Chinese and Western scholarly traditions, five themes are identified as influencing the cultural preferences of China’s household saving. These are: (i) precautionary motives; (ii) habit formation; (iii) children’s education; (iv) consumer credit; and (v) teaching thrift. The holistic approach of this study has allowed a deeper understanding of the role of cultural values on agency and structure in economic events and their subsequent impact on household saving. Results of this investigation indicate that the Confucian value of family ties and ‘Zhong Yong’ – the Golden Mean, which translates essentially as balance, enable Chinese households to save. This development has highlighted a growing tension, in China’s modernity process, between the traditional Confucian value of thrift and the Western cultural influence of stimulating economic growth by consumption. After consideration of current saving practices and the anticipation of economic changes, this research advocates the striking of a balance between household saving and increasing consumption in China in order to avert a future financial crisis and to facilitate economic growth. The implication of this research is that finding a balance between household saving and consumption is crucial to sustainable future development in China as it shifts its development focus from investment and export-led to domestic consumption-driven growth and social development.

Additional Information

Thesis written under name Zhang-Ming Boffa.
Full-text is not available from this Repository

Item type Thesis (PhD thesis)
Official URL
Subjects Historical > FOR Classification > 1402 Applied Economics
Historical > Faculty/School/Research Centre/Department > College of Business
Keywords China; Household saving; Consumer credit; Cultural influence
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