At the Globalist, Joseph Quinlan writes:

There is a great deal more economic angst affecting the average Chinese household than the average U.S. household. China’s extraordinary savings rate is one metric of this anxiety.

The average Chinese household squirrels away a quarter of its after-tax income, one of the highest savings rates in the world. Why such a high level of savings? Prudence is one factor. Fear of the unknown is another.

And this:

China has an outsized savings rate and low consumption-to-GDP-ratio because the average Chinese citizen is petrified of getting sick, afraid of losing his or her job, insecure about retirement and bent on making sure that his child gets the best education money can buy.

But, after socking away a little cash for health care, retirement, education and a few extra yuan in case of being laid off, there is little spending power left. Throw in rising housing costs, and the cost of caring for the elderly — and the average Chinese consumer is feeling anything but solvent.

To read more:

http://www.theglobalist.com/storyid.aspx?StoryId=6533