Peking University

With a rise in US savings putting unbearable pressure on China's low consumption rate, leading to the risk of a collapse in China's ability to export its overcapacity, the question about why Chinese households save so much of their income has become more important than ever.

Everyone seems to know the answer. Chinese households save, many insist, because the Confucian culture encourages saving for the future. Saving is deeply and culturally imbedded in the Chinese psyche.