Poverty, Vulnerability, and Fiscal Sustainability in the People’s Republic of China—Highlights

Expenditure on education rose from 1.8% of GDP in 2000 to 3.9% in 2012 before declining to 3.5% in 2019; health spending rose from 0.5% in 2000 to 1.7% in 2019 with a peak of 1.8% in 2016; and social security and employment spending rose from 2.0% in 2007 to 3.0% in 2019. [...] The government needs to consider the level of social services and protection financed by the state against the amount shouldered by individuals and households. [...] This report focuses on the vulnerability and risks of four specific groups: (i) the elderly; (ii) young children of rural migrants; (iii) the rural population and rural-to-urban migrants; and (iv) those whose access to health care is jeopardized by urbanization and aging. [...] Both the central government and the local government must pay attention to the amount of existing debt in comparison to the interest rate sensitivity of demand for government bonds. [...] In addition, the response to the pandemic laid bare both the strengths and weaknesses of the PRC healthcare system.