Indication that China's economy is close to second largest in the world came today with the release of Japan's growth figures for the second quarter.
Where's all the money going, Sohu economics forum member BRY seems to ask in this post from last week, “Why do Chinese always save so much?”, starting first by comparing the health care systems of Australia, Sweden and Thailand with that of China:
And the comparatively low cost of post-secondary education in countries such as UK, France and India:
Followed by the state of old age pensions in China and elsewhere:
If these three mountains aren't reason enough to explain why Chinese tend to save so much, then you can add the house. Current housing prices are elevated to the point that a middle income family has the choice of either spending more than half their life savings, or remaining slaves to a mortgage for the duration of their lives.
The reason Chinese always save so much is because everything that gets squeezed out of today gets spent on tomorrow. Chinese aren't money hoarders, rather it's that they're insuring themselves, and trying to leave something for their children. With the social insurance system as lacking as it is today, the only option Chinese have is to struggle selflessly in order to provide comfort and stability for their families and the future generation.
Related: the banks appear to be performing to expectation.
(The thumbnail for this post was borrowed from this photo of a RMB 100 bill taken by Flickr user Comer Zhao)