China’s low consumption has been on the headline of newspapers recently. One of the perceived causes behind the low consumption is China’s high saving rate (See Graph from Chinatells). Naturally the next question is, why China has such a high saving rate, which makes investment so appealing. A lot of reasons have been put on the table, such as imperfect social security network, high education and medical cost, huge aging population that need to be supported, and high property price. In addition to above, there are also scholars to advise alternative views (See Article from Beijing Review). According to a recent study, in fact Chinese household’s saving rate has not increased but decreased relative to government and corporate. There seems to be a distortion of income redistribution from govenment and state owned enterprises to individuals. A striking finding is that some banks are lending money to big corporations at an interest rate lower than the deposit rate to individuals. An effort to marketize the interest rate is called by scholars to the government.