To bring down the high savings rate in China calls for a more comprehensive therapy which combines domestic reform and international efforts, than a simple change of exchange rate, said central bank governor Zhou Xiaochuan in his recent essay.

Though many people believed a certain price, such as the exchange rate or the interest rate, would decide the choice between saving and consumption, the savings rate was in fact under the influence of many other factors, and it would be an over-generalization to assume that a change in exchange rate could largely bring down the savings rate, Zhou said in an essay published on the website of the People's Bank of China (PBOC).

Zhou said the high savings rate in eastern Asian countries is affected by the cultural tradition that encourages thrifty and self-disciplined lifestyle, as well as population structure and the stage of economic development.

The Chinese government has been intentionally taking measures to bring down the savings rate since 2005, when it adopted policies to expand domestic demand and stimulate consumption, said the essay.

In the article, Zhou asked for reforms in economic growth pattern, industrial structure and pricing systems to bring down the savings rate in eastern Asian countries.

He also demands more cooperation between countries and international organizations and reform of the international monetary system.

In another signed article also published on the PBOC website on Monday, Zhou had proposed to create a super-sovereign reserve currency "that is disconnected from individual nations and is able to remain stable in the long run," as part of the reform in the international monetary system.

Source: Xinhua