In this paper, we use a panel of Chinese households covering the period 1989-2006 to analyze the evolution of household income. Over this period, there has been a strong upward trend in income across the board but income uncertainty has also increased substantially. While the permanent variance of household income remains stable, the transitory variance shows a sizable increase. A calibration of a buffer-stock savings model indicates that rising savings rates among younger households—despite the rapid anticipated income growth for these workers—are consistent with rising income  uncertainty, and higher saving rates among older households are consistent with a decline in the pension replacement ratio for those retiring after 1997.