Zhuo Yunbao and Lan Nan buy their clothes at inexpensive stores in underground malls and neighborhood outlets. They rarely eat out. Their 8-year-old son's tiny...

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SHANGHAI, China — Zhuo Yunbao and Lan Nan buy their clothes at inexpensive stores in underground malls and neighborhood outlets. They rarely eat out. Their 8-year-old son’s tiny room is bare of toys.

It’s not that the Shanghai family is poor. Far from it. By Chinese standards, they are part of the growing middle class, between them grossing around 7,000 yuan a month — about $860.

But instead of spending their way to a higher standard of living, the Zhuos are saving nearly half their income. They say they have little choice.

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Like most Chinese, the Zhuos face financial insecurities. Their health insurance is full of holes. The price of most homes here is beyond their reach. School tuition, once paid for by the state, is rising. And the couple, both 34, worry about who will take care of them when they are old.

“I feel very tired when I think about this,” Lan Nan says. “It seems we can only save … and will always save this way.”

The Zhuos illustrate why the Chinese may be the most prodigious savers in the world. China’s economic reforms have vastly improved living standards, but the last two decades also have seen a dismantling of the socialist “iron rice bowl” that provided basic health and welfare from cradle to grave. The result is that many Chinese feel more insecure about their future than their parents’ generation did.

Chinese families are saving about half of their income. Analysts believe that has contributed to a “global savings glut” that has helped push down interest rates and, in the United States, fuel excessive spending.

U.S. households have been spending more than they have been earning in recent months. That contrasts with an average savings rate — or savings as a percentage of income — of 8 percent from 1950 to 2000.

For China, high savings have pumped up investment at home and supported export industries. But the country’s widening trade surplus has triggered complaints from the United States. In a visit to Beijing last month, Treasury Secretary John W. Snow suggested that the Chinese save less and spend more — on U.S.-made goods to help ease America’s big account deficit.

But most experts expect China’s savings rate to stay high for years to come because of the need to prepare for a large dependent elderly population. The median age of China’s population has jumped to 32.6 from 22.1 in 1980, says Andy Xie, an economist at Morgan Stanley in Hong Kong, mainly because of the nation’s one-child policy.

The trend is pronounced in cities such as Shanghai, where gleaming skyscrapers and high-end boutiques belie the frugal lifestyles of many residents.

The Zhuos are typical. The couple met at a metallurgical technical college in Shanghai. They graduated together, and today both have desk jobs, he at a state-owned educational-services company and she at a private logistics firm.

Their combined monthly income puts them above average for wage earners in this city of 17.4 million residents. A fifth of their paychecks goes to taxes and their portion of the costs for health insurance.

Zhuo and Lan live with his parents in a 700-square-foot dwelling on the fifth floor of an old, elevator-less building, one of 87 in a complex in northeast Shanghai. The unit was given to Zhuo’s mother, Xia Xiuying, by her employer about 25 years ago. Although she does not legally own it, Xia has long-term lease rights to it and doesn’t pay rent.

“We stay here, so it’s ours,” says Xia, 74, flashing a big, toothless smile as her husband, Zhuo Qingqui, 76, gazes at a 15-inch TV in the living room.

Zhuo and Lan skimp in every way. Five days a week, Zhuo takes the 7 a.m. bus for a quarter, rides standing up for an hour, then transfers at People’s Square station, where he squeezes into a subway train for 50 cents. He arrives at work at 8:30, carrying a sack lunch made the night before by their part-time housekeeper, whom they pay $45 a month.

Apart from groceries, utilities and $20 monthly premiums for $25,000 life-insurance policies for each of them, the Zhuos have few other expenses. On weekends, they walk to a park nearby and play badminton. The family seldom travels very far for vacation.

“We’re a little bit tight about our spending,” Zhuo says unapologetically.

China, like other nations in East Asia, has a long tradition of thrift. Analysts say it may be linked to Confucian values that encourage thrift and production rather than consumption.

China’s propensity to save also reflects its agrarian society, where people face more risks of fluctuating incomes and their long work hours leave them with little leisure time to consume.

Zhuo Yunbao recently had a scare when his father was hospitalized with a stroke. He says his father may need a pacemaker, but that’s not covered by the state insurance for the elderly.

But the family is saving for more than a rainy day. They want to buy a car. A few years from now, Zhuo says, maybe they’ll look at moving into a bigger home. Shanghai housing prices have soared in recent years, at a rate far exceeding income gains. Even a small apartment such as the Zhuos’, away from the heart of the city, is selling for $75,000. Some families are saving in case they’re uprooted by developers, a common occurrence in China.

More than anything, though, the Zhuos are saving for their son’s education.

On a recent weekday, it was approaching 10 p.m. and Tiancheng’s mother was drilling him on English pronunciation. “Mouth. Nose. Hands,” Lan Nan repeated slowly, as the third-grader, still in his blue-and-white school uniform, labored to keep up. When finished, the boy climbed up the tiny circular staircase in the living room into his room, converted from an attic, and turned on an English study tape as he changed for bed.

For now, the family pays only nominal fees for Tiancheng’s schooling; public education is subsidized by the state until the ninth grade. But tuition for senior high school runs $250 a year or higher for better institutions, and there are hefty additional expenses for cram schools and extracurricular activities. The cost for college education is typically at least $1,250 a year.

Like many young Chinese parents, the Zhuos want to send their son abroad for college. They have their sights on England or the United States, where four years of tuition could reach $125,000. The family has saved a little more than 10 percent of that.

“We have a long way to go,” Zhuo says.

Los Angeles Times reporter Cao Jun contributed to this report.