China spends less on health care and social assistance than other countries with similar incomes
which is the land of rugged self-reliance and which of the government handout? Judging by support for people on low incomes amid the coronavirus crisis, the answer is surprising. America has dramatically scaled up benefits for those out of work. Its federal stimulus has allocated an extra $600 a week to each jobless person—enough, on average, to replace 100% of lost income. The Chinese government, meanwhile, has given an extra 12 yuan a week to its poor.
Analysts often point out that China’s official unemployment rate understates the problem, since it only captures full-time urban residents. Economists fromand Société Générale think that, by broader measures, as many as 80m might have been out of work in March. That is nearly 20% of the urban workforce. Yet the more salient point is how few of the unemployed receive any help from the government. According to the human-resources ministry, just 2.3m people are on the dole.
But China has refrained from stoking growth in response to the covid slump. It wants people to stay closer to home until the virus is vanquished. So the government is relying on its ultimate safety net, the countryside. Many of China’s nearly 300m migrant workers—those most likely to find themselves unemployed without benefits—have some combination of rural land, savings and family to fall back on. “I suppose the government expects migrants to rescue themselves.
One reason to help the needy is moral. But there are also economic arguments for greater social spending. It would deliver an immediate boost to growth. Returns on capital have declined steadily in China over the past decade. So the government is reluctant to stimulate growth by splurging on yet more railways and airports. TheIt would also be consistent with what the government itself wants: growth driven more by consumption and less by pouring concrete.
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