Try to connect to your personal experience or to that of people you know regarding living expenses and relevant fees. If you or your peers are earning-relatively-low income then it’s highly likely that the better part of that -relatively-small amount is spent rather than saved. Another way to state that fact is by saying that you or your peers or people at the low end of the income distribution in general, enjoy a high propensity to consumption (out of income, that is).
Usually, that result is cast it in a psychological perspective about relative abstinence propensities between poor and wealthier people. Irrespective of methodological loyalties, it is a fact that income can either be spent or it can be saved. Statements about the propensity to consume, are effectively statements about the uses of income (spending vs saving).
Notice we are not saying anything about wealth and related streams of earnings originating from property, titles etc. I guess you could say that a tacit assumption is that poor people own little or no wealth and as such enjoy a single revenue stream which is-for the most part-wages and salaries (and probably whatever net transfers they are entitled to by local, state or federal governments depending on the jurisdiction of their domicile or otherwise).
Another way to see this is by trying to convince yourself that for the most part (and if you don’t include luxury goods like yachts and sport cars etc) in a cross-section of consumption baskets across different levels of income, the value of commodities purchased increases with the income bucket but the rate of increase in bundle price is lower than the rate of increase in incomes. Simply put, poor people spend a larger share of their income for the same range of goods that wealthier people purchase.
Now, one needs to consider a bit what kinds of commodities and services enter the baskets of consumers. There are items like foods and beverages, there’s clothing and shoes, there’s housing and related services eg repair services, there’s also transportation related services and there are fees for education services eg kids in college, fees for insurance services eg retirement plans and medical coverage plans and probably other relevant costs like utilities, municipal fees or whatever applies at different jurisdictions. Generally speaking, the items that cost more in a family or personal budget are those related to institutional services like education, insurance etc.
In more advanced countries, services related to institutional units are tightly integrated in the economic process eg there’s tripartite participation in employee insurance (probably mostly a European thing), medical and retirement plans are usually parceled with remuneration packages (or at least it used to be the case for the majority of the workforce) etc. On the other hand, this is not the case in developing countries in general and China in particular.
A major theme about Chinese economic development is financial repression. This simply means that the Chinese authorities hold interest rates artificially low in order to facilitate economic growth. Low interest rates induce investment but they also allow misallocation of resources, mainly because the financial system in China is highly regulated and subordinate to state objectives. In such an institutional setting, the Chinese people (workers and consumers alike) face a difficult budgeting problem, namely how to allocate their incomes between consumption and saving. Savings need to be abundant enough to cover for medical expenses and retirement because classes of assets that tend to relevant needs are not provided otherwise. The people need to fend for themselves in that regard.
So, in an uncertain environment, consumption is held artificially low, by low interest rates that eventually translate into high propensity to save for the Chinese people (or what is equivalent, low propensity to consume).
If you are interested in all things Chinese I strongly urge you to look up Michael Pettis. I’m convinced his writings will be addressing the bulk of your concerns and even if you don’t agree, for some reason, to his approach, you’ll definitely have a solid argument to grind your teeth against.
Hope any of this helps.
Have a nice one!