I came across this post by Michael Pettis on his analysis on why he thinks Chinese saves much more than the US. There are multiple reasons listed, most of which relates to policies and how Chinese do not have a safety net, how the credit system is not in place yet.
I think the real question is: why are Americans saving so little, and the Chinese saving so much?
In my mind, there’s one simple answer. Americans have formed the habit of spending their future projected earnings, and the Chinese have formed the habit of insuring their future with current and past earnings.
Digging a layer deeper, Americans are confident that good and better days, will come while the Chinese worry that good days will not last.
I agree with Pettis that the reason is not purely “cultural” but largely sociological.
