China’s national saving rate is among the highest in the world, and Chinese consumers are believed to be “notorious savers” because of their traditional Confucian virtue of frugality. However, in recent years, China’s national and household saving rate has been, in fact, declining from its all-time peak in 2010, a phenomenon that seems at odd with the frugal stereotype. To understand the decline, my Independent Study project will explore mobile payment, one of the major technological developments that is observed to have significantly changed the payment market in China, and its effect on saving rates. This interdisciplinary project first includes a descriptive chapter that analyzes specific functions in WeChat Pay and Alipay, the two largest mobile payment services providers in China, and considers how the functions may induce less savings. Then, after inspecting several theories and empirical articles that support my research question, an empirical analysis using the probit model and the 2017 Global Findex Database will be presented. My main hypothesis is that mobile payment has a negative effect on savings of a relatively small magnitude. Although the empirical results do not support the hypothesis, a discussion of the implications of the analysis, how future policies should be made, as well as possible research directions is provided.


Long, Melanie

Second Advisor

Bonk, James


Business Economics; East Asian Studies


Asian Studies | Behavioral Economics

Publication Date


Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis



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