Explanations for the high saving rate in China consistent with the life-cycle reason for saving include:
A) China's limited social safety net provides most people with little protection against health problems and medical costs.
B) few opportunities to borrow funds for education or paying for a house.
C) the desire to leave resources to children who provide support and attention to parents in their old age.
D) low unemployment rates in China.

Question

Quizplus · Accepted Answer

The Chinese financial system, which is closely controlled by the government, does not provide much opportunity to borrow. In terms of the life-cycle reason for saving, this means few opportunities to borrow funds for future planned expenses such as education or paying for a house.

Explanations for the High Saving Rate in China Consistent with the Life-Cycle