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> 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

> 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
  - fspeech 1y ago
    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.

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
- fspeech 1y ago
  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.