China central bank worries about high savings rate

SHANGHAI (MarketWatch) -- China must be vigilant in monitoring its high ratio of savings, as too high a ratio could lead to asset bubbles and industrial overcapacity, People's Bank of China Gov. Zhou Xiaochuan said Friday.

Given the country's high savings ratio, it is necessary for Chinese systemically important banks to raise their capital bases, Zhou said.

Zhou made the comments during the Lujiazui Forum, an event which brings together 800 government officials, industrial executives and scholars to discuss how Shanghai can transform itself to rival global financial centers like New York, London and Tokyo.

During the forum, Zhou also said China will "cautiously" encourage cross-border yuan investment.