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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 li

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.

alephnerd 1y ago
> 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. [0] - https://www.stats.gov.cn/english/PressRelease/202501/t20250124_1958443.html https://www.stats.gov.cn/english/PressRelease/202501/t202501... [1] - https://www.nso.go.th/nsoweb/storage/survey_detail/2023/20231018103954_32528.pdf https://www.nso.go.th/nsoweb/storage/survey_detail/2023/2023...
- fspeech 1y ago
  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.
  - alephnerd 1y ago
    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. [0] - https://www.stats.gov.cn/sj/ndsj/2024/indexeh.htm https://www.stats.gov.cn/sj/ndsj/2024/indexeh.htm
araes 1y ago
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] [1] By age chart: https://www.healthsystemtracker.org/indicator/spending/per-capita-spending/ https://www.healthsystemtracker.org/indicator/spending/per-c... 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. [2] https://www.retireguide.com/retirement-planning/risks/medical-bankruptcy-statistics/ https://www.retireguide.com/retirement-planning/risks/medica... 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%"

alephnerd 1y ago

> 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. [0] - https://www.stats.gov.cn/english/PressRelease/202501/t20250124_1958443.html https://www.stats.gov.cn/english/PressRelease/202501/t202501... [1] - https://www.nso.go.th/nsoweb/storage/survey_detail/2023/20231018103954_32528.pdf https://www.nso.go.th/nsoweb/storage/survey_detail/2023/2023...

fspeech 1y ago
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.
- alephnerd 1y ago
  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. [0] - https://www.stats.gov.cn/sj/ndsj/2024/indexeh.htm https://www.stats.gov.cn/sj/ndsj/2024/indexeh.htm

araes 1y ago

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] [1] By age chart: https://www.healthsystemtracker.org/indicator/spending/per-capita-spending/ https://www.healthsystemtracker.org/indicator/spending/per-c... 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. [2] https://www.retireguide.com/retirement-planning/risks/medical-bankruptcy-statistics/ https://www.retireguide.com/retirement-planning/risks/medica... 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%"