China's national savings rate: 1978–2005. Source: National Bureau of Statistics of China (2006), China Statistical Yearbook 2006, Beijing: China Statistics Press and Beijing Info Press.
Canadian personal savings rate
Commentary: I think the Chinese are going to win this race. The Americans are in the same boat as Canadians in terms of minimal savings and maximum consumption. It is hard to comprehend that, as North Americans, we have allowed our savings rate to drop from the 15% range to under 5% despite our relative wealth compared to the Chinese. What fallacy are we clinging too that "the government" will somehow fix the economy so we can return to our consumptive ways? The Chinese have few social safety nets to fall back on in the event of unemployment yet, they are the primary bond buyers of American debt. There is something very wrong with this picture in my view. We have a saying where I work, "the world eventually unfolds as it should". I wonder how much American and Canadian real estate and companies the Chinese will buy up while we struggle with ballooning deficits and debts?
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