Question

3- Find the 3 errors and correct versions in the following text.

CHINA’S UNBELIAVABLE NATIONAL SAVINGS RATE

China’s national savings rate, quite recently exceeding 50%, is the highest among the major economies in the world. In any economy, the national savings is composed of the savings of households, firms, and the government. In China the household savings, making up about half of national savings, is the biggest component of national savings. Firms also make a big contribution to China’s savings rate. However the government, because of budget deficits, makes a negative contribution; meaning it doesn’t contribute but use up savings of households and firms. One Child Policy, through the Demographic Dividend effect is the most important factor explaining the fast rise in the household saving rate in 2000’s. The saving boosting impact of this policy is expected to grow larger as the population ages in China. Another factor behind the rise in China’s household savings rate is the fast rise in disposable incomes in the country. The high level of income equality in China also contributes positively to country’s high savings rate.

Answer 1

The first stat is wrong as in 2007 china's national saving rate was 51% and not recently. In 2017 the national savings rate was 47%. Currently Singapore has the highest saving rate.

The second stat is correct that household savings contribute most to the national savings due to one child policy

Third stat is wrong as Chinese government savings rate has stabilised since 2008 at around 5% of GDP one of the highest among major economies.

It is correct that firms make positive contribution to china's national savings since 2000 and are still moderately high than world average.

This one's wrong (One Child Policy, through the Demographic Dividend effect is the most important factor explaining the fast rise in the household saving rate in 2000’s)

Because The surge in Household savings was due to introduction of One child policy In the 1980s

True - The saving boosting impact of this policy is expected to grow larger as the population ages in China

True -Another factor behind the rise in China’s household savings rate is the fast rise in disposable incomes in the country. The high level of income equality in China also contributes positively to country’s high savings rate.