Consumption habit is much more dependent on personal experience and has little to do with the safety net. Older retired people with state pensions still have little desire to spend or don't even know how to spend in the new online economy, while young people who never experienced hardship are happy to spend every penny. If you want to increase spending you need to steer income to young people (child credit e.g.). Healthcare is mostly accessed by old folks. Generous pension and healthcare benefits are not going to lift spending.
Personal view on the healthcare side, at least in America, while the old spend 36% compared to 10-15% in every other age category, 10-15% spend is still relatively significant. [1]
In America, the average age of medical bankruptcy is 45 years old, that's not really that old. [2] 17% had to declare bankruptcy or lose their home and 45% of Americans worry a major health event will bankrupt them.
I might personally spend more money if I had a difficult health condition and reasonable healthcare, vs being uninsured and crippled by financial costs. If I live every day in fear of bankruptcy, I'm not very willing to spend money on much of anything I don't "really" need.
Having worked in the government, the pension thing is difficult. They exhibit a J-shaped accrual pattern, where young workers don't get much, and long term workers are difficult to pay for. So the motivation is to burn people out and then get rid of them before the pension costs get to be too much.
They're "supposed" to be funded to an adequate amount to pay for the benefits, yet political pressures and less rigorous accounting standards result in excessive commitments to employees and retirees, but inadequate contributions. In the American gov that has resulted in a lot of attempts at buy-outs, early retirement schemes, and almost anything to get people off the pension payrolls.
Personally, an acceptable result was the employee matched retirement contribution. That worked acceptably from my own experience in the government. Generous ceiling on how much we'll match, and employees who actually use the program are effectively getting a 3-5% pay raise because of contributing. IE: "I put in 5%, and my employer matches my contribution with 5%"
> Consumption habit is much more dependent on personal experience and has little to do with the safety net
The per capita (not median, so skewed upward) yearly expenditure of a Chinese household in 2024 was Yuan 28,227 [0]. The per capita urban household in China had around Yuan 34,000 a year in expenditures in 2024, and the per capita rural household in China had around Yuan 20,000 a year in expenditures in 2024.
61% of a per capita Chinese household's expenditures are just on food, residence, and healthcare. And that becomes 75% when factoring transit and telephone/internet bills.
Only 11% of a per capita household spend was on recreation, 5% on clothing, and around 3% on miscellaneous services.
This means the mean household in China only had aroud Yuan 7,000/$1,000 in all of 2024 on anything that is a non-essential or discretionary purchase. This is abnormally low for a country with China's GDP per capita and highlights a very real problem for the bottom half of Chinese households.
Heck, in Thailand in 2022, the median household only spends 1.4% of their income on medical care [1] and with a significantly higher household disposable income ($600/mo) and significantly better health indicators.
Literally reducing the per capita Chinese household's healthcare spend to the same ratio as Thailand's would unlock an additional Yuan 2,200 a year that can be used on discretionary spend. That itself could unlock (back of napkin math) almost $161 billion in potential discretionary spending or an additional 0.7%-0.8% of GDP growth, thus allowing China to hit the 5% GDP growth target while also reducing overproduction and increasing health standards.
And that's just healthcare.
This is why China needs a LBJ and FDR style Great Deal and New Deal reform. China is growing much slower than it should be because of pigheadedness at the upper echelons of leadership preventing this kind of development.
China's median age is now 40. 20 years ago the college enrollment and urbanization rates were much lower. That's why the numbers alone don't tell the whole story for a fast changing economy like China's. You need to look at disaggregated numbers if you want to make predictions.
Also the number you quoted lumped housing together with other costs.
China has very high home ownership and home prices are very elevated. Much public services and transport infrastructure builds are funded through government land sales and therefore through home sales. That could also skew the data.
Another problem with the national median data is the great variations in development levels and therefore cost of livings across geographic regions.
It's not easy to change the spending habits of the older adults. Consumption is also work. It's about increasing utility, not just spending. Consider the time after the Fukushima when misinformed consumers hoarded salt. It would be hard to argue that consumption increased utility. You want consumers to be informed, you want spending to discriminate against incompetent manufacturers and bad services. If older adults get more utility from watching their bank accounts grow than doing the work to consume without regrets, just shoveling more money indiscriminately isn't going to stimulate consumption much.
Not a single thing you have said justifies not expanding the social safety net in China. I have literally provided data from 国家统计局, and all you have provided are anecdotes about why expanding the social safety net will not have an impact.
Show me the data that justifies not expanding the social safety net in China. I have provided a moral, economic, and developmental reason all showing the net benefit for China to expand the social safety net - and this is a fairly common view in Chinese academia as well.
To continue using my healthcare example, only the top 20% of households in China even have a disposable household income (Yuan 95,000 [0]) comparable to China.
In fact, the bottom 60% of Chinese households have a lower disposable household income than that in Thailand. For these households, an additional Yuan 2000 a year would be have a significant positive impact.
If you think trickle down economics work and expanding the social safety net is unnecessary, just come out and say it - just like the Xi administration did.
But you cannot deny the wealth gap that China has - and it is a severe one compared to it's peers at it's GDP per capita. The only other country amongst China's developmental peers with a similar disparity is Brazil.
If this disparity is not resolved, then best case a plateau similar to Malaysia's occurs.
Your arguments are not supported by what is actually happening. They just rolled out child payments and I support that. Pensions grew very fast for 体制内 people and there is scant evidence that stimulates spending other than burdening local finances. 大病保险 reimbursement rate is also up a lot while office visit costs are kept very low and while I think that is good there's little evidence that it stimulates consumption.
Your attack on my analysis as annecdotes is ridiculous. For one to induce change one needs differential data to get the derivatives on proposed changes and your citation of national bulk statistics at a point does nothing of that sort. Secondly on the ground experience can provide directions that inform experimentations. Government finance is tight. You don't want to get another 100% GDP in debt with little to show (as in Japan). Thirdly this is not an academic forum and I am not an expert. If you feel like you are one you can write papers on your ideas. Attacking me isn't going to achieve anything.
> They just rolled out child payments and I support that
Absolutely, and it's a good start, but more can be done. This is literally the bare minimum.
> Pensions grew very fast for 体制内 people and there is scant evidence that stimulates spending other than burdening local finances. 大病保险 reimbursement rate is also up a lot while office visit costs are kept very low and while I think that is good there's little evidence that it stimulates consumption
体制内 only represent around 4% of Chinese according to the 2018 census [0], but I would be shocked if the number in 2025 has broken 5%. Most Chinese are not 体制内, and any impact of 体制内 social spending expansion has no bearing on China as a whole.
> Pensions grew very fast for 体制内 people and there is scant evidence that stimulates spending other than burdening local finances
Most Chinese - and especially elderly Chinese - are not 体制内. The majority of social safety spend it basically gated for 体制内.
> 大病保险 reimbursement rate is also up a lot
Show me the data and show the the trendline. What is the rate of change. Is it statistically significant?
While the rate of catastrophic health emergencies (ie. those health emergencies that can bankrupt a household) has reduced from ~16% in the early 2010s to ~13.8% in 2022 [1], this is still an elevated rate.
In both studies, severe spatial inequality was found. An acquaintance who was an alum of the same research group as mine who returned to China to work in healthcare investment banking and then a C9 research and lecturer position worked on a similar study, and they had to return to the US because their grant was pulled because it ruffled some feathers at their department.
> Your attack on my analysis as annecdotes (sic) is ridiculous
Anecdotal evidence is evidence that is unsourced. As I mentioned before, show me the data if you are giving assertions.
> You don't want to get another 100% GDP in debt with little to show (as in Japan).
Absolutely, and this is what makes me annoyed. Industrial policy is good, but the manner in which it was approached from 2017 onwards was reckless. Look at EVs as an example.
Billions of dollars were burnt by provincial owned SOEs to build EV brands yet none of them aside from SAIC has even come close to competing with private sector BYD (which had a comparative advantage of being a leader in battery chemistry for decades that pivoted into automotive around 2008-09). Nor did EV manufacturing provide a significant amount of jobs for a large number of provinces.
The comparative advantage that Guangdong, Shanghai, Zhejiang, and arguably Anhui had in automotive manufacturing should have meant the rest of the provinces in China and some of the central SOEs should have have even touched EV production, and could have reallocated capital to either building industries that these provinces had a comparative advantage in or spend on social welfare. Yet mid-level functionaries incentivized this kind of spending to climb up the ladder as well as induce demand on LGFVs during the real estate crisis.
And that's just EVs. This is a common problem across Chinese industry, and it is discussed at C9s and amongst diaspora academics as well, but the upper echelons of leadership response very very slowly. Heck, I was warning on HN that there was going to be central intervention into the EV price war years before the recent actions by the central government.
> this is not an academic forum
It is commonly accepted on HN to give sources to assertions, as a large subset of us were ex-academics.
> If you feel like you are one you can write papers on your ideas
Been there, done that. The research group I was affiliated with back when US-China relations were more optimistic advised on what became 精准扶贫 because of 李克强's backing.
> Attacking me isn't going to achieve anything
Asking for sources to assertions is not an attack. Asking for basic data analysis (which is a table stakes skill in the tech industry in 2025) is not an attack.
