Chinese Economics Thread

[abenomics12345]

全会提出，在发展中保障和改善民生是中国式现代化的重大任务。必须坚持尽力而为、量力而行，完善基本公共服务制度体系，加强普惠性、基础性、兜底性民生建设，解决好人民最关心最直接最现实的利益问题，不断满足人民对美好生活的向往。要完善收入分配制度，完善就业优先政策，健全社会保障体系，深化医药卫生体制改革，健全人口发展支持和服务体系。

It was stated that ensuring and enhancing the people's wellbeing in the course of development is one of the major tasks of Chinese modernization. Striving to do everything within our capacity in this regard, we must refine the system for guaranteeing basic public services, work to provide inclusive public services, meet essential needs, and provide a cushion for those most in need, and focus on resolving the most practical problems that are of the greatest and most direct concern to the people, so as to meet people's aspirations for a better life. We will improve the income distribution system, the employment-first policy, and the social security system, further reform the medical and healthcare systems, and improve the systems for facilitating population development and providing related services.

For people who don't have a sense of how unfair this is today:

The Social Security takes in about 7.7 trln RMB of premiums and pays about 6.84trln in benefits a year. The reserve fund is at about 7.8trln.

(By comparison, the US Social Security has 2.8trln USD of assets vs. 1.4trln USD of benefits paid out a year and ~the same amount of premiums collected; Canada Pension Plan has ~630bln CAD of assets vs. 56bln of annual benefits paid out and 61bln of contributions)

Urban (Employee + Resident): 521mln people are covered by the scheme, of which 380mln pay into it and 142mln people collect retirement benefits. Of the 7.7trln in premiums collected, 7 of that (90%) are collected from urban employees and 6.4trln of the 6.84trln spent are for urban retirees.

Rural Resident: 545mln people are covered by the scheme of which 172mln collect benefits. Total collections are 619bln while total expenditures are 461bln.

Put in other words, the average urban retiree collects on average 45k RMB/yr while the average rural retiree collects 2680 RMB/yr.

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[henrik]

Frankly speaking there is nothing unfair about it. China protected its internal market in order to grow its industries, so there is zero justification to cry foul when other nations to do the same. China just needs to deal with it and adjust accordingly. The export driven model has ran its course and accomplished its objectives, future growth will need to be more heavily driven by domestic consumption.

China's market has always been open to foreign competition. They even welcome foreign companies setting up in China, by giving them all the favorable conditions and financing. This is unlike western countries, which are making up reasons for taxing Chinese products.

 

[xlitter]

You are ignoring my question. If you do not know the answer, you are welcome to not respond or hijack the point.

As for that specific point I've actually spoken to Glenn in-depth so you're preaching to the converted.

Why not look at the specific statistical caliber?
4. Calculate the diameter
Since the scope of enterprises (units and self-employed individuals) in the wholesale and retail trade, accommodation and catering industries above a designated size changes every year, in order to ensure that the data for this year are comparable with the previous year, the year-on-year growth rate of various indicators such as the retail sales of consumer goods above a designated size is calculated. The figures for the same period are consistent with the statistical scope of enterprises (units and self-employed individuals) in this period, and there is a difference in caliber from the data released last year. The main reason is that every year, some enterprises (units and self-employed individuals) reach the quota and are included in the scope of the investigation. At the same time, some enterprises (units and self-employed) withdraw from the scope of the investigation due to their smaller scale and cannot meet the quota. There are also new businesses, bankruptcies, and injections. The impact of (revoking) enterprises (units, self-employed persons).

Since the scope of key platforms included in online retail sales statistics changes every year, in order to ensure that this year's data is comparable with the previous year, the same period used to calculate the year-on-year growth rate of online retail sales is consistent with the scope of platform statistics for this period, and the same as that published last year.
There are caliber differences in the data. The main reason is that every year new platforms are included in the scope of the survey, and some platforms that do not meet the requirements of the statistical system are withdrawn from the scope of the survey.

 

[xlitter]

For people who don't have a sense of how unfair this is today:

The Social Security takes in about 7.7 trln RMB of premiums and pays about 6.84trln in benefits a year. The reserve fund is at about 7.8trln.

(By comparison, the US Social Security has 2.8trln USD of assets vs. 1.4trln USD of benefits paid out a year and ~the same amount of premiums collected; Canada Pension Plan has ~630bln CAD of assets vs. 56bln of annual benefits paid out and 61bln of contributions)

Urban (Employee + Resident): 521mln people are covered by the scheme, of which 380mln pay into it and 142mln people collect retirement benefits. Of the 7.7trln in premiums collected, 7 of that (90%) are collected from urban employees and 6.4trln of the 6.84trln spent are for urban retirees.

Rural Resident: 545mln people are covered by the scheme of which 172mln collect benefits. Total collections are 619bln while total expenditures are 461bln.

Put in other words, the average urban retiree collects on average 45k RMB/yr while the average rural retiree collects 2680 RMB/yr.

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Isn’t it reasonable for more people to pay to get more pensions? Is it fair to receive the same pension no matter how much you contribute? In addition, if rural residents have never paid social security, they will now receive subsidies instead of pensions!

 

[abenomics12345]

Isn’t it reasonable for more people to pay to get more pensions? Is it fair to receive the same pension no matter how much you contribute? In addition, if rural residents have never paid social security, they will now receive subsidies instead of pensions!

Great question, of course it's reasonable that the people who pay more to get more pensions! But the fact here is 200 RMB/month is barely enough to buy sufficient grains, let alone retire.

Majority of the migrant workers who are working and living in cities (200-300mln) - they are calculated as part of the urbanization rate (~67%) - are not allowed to contribute to the urban pension scheme at the place where they work and live! So if you are a Didi driver from Zhumadian in Henan working in Shanghai, making 8-10k/month, you are not allowed to contribute to the Shanghai pension scheme nor enjoy Shanghai's social services. So obviously you are not stupid and recognize that your rural 200/month retirement benefits aren't enough - so you are saving almost everything you can.

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以户籍制度改革促进消费的效果为例，2022年，外出农民工家庭的人均年收入达到4.2万元，接近城镇中间收入组平均4.4万元的水平。由于没有城镇户口，未能均等享受城镇基本公共服务，农民工的消费低于城镇居民平均30391元的水平，据研究估算，他们消费被抑制的程度为23%左右。

 

[Jiang ZeminFanboy]

https://twitter.com/i/web/status/1815287985254137947

Someone posted earlier that tax reform are coming, indeed tax reform are coming and local goverments should be able retain more than before

 

[xlitter]

Great question, of course it's reasonable that the people who pay more to get more pensions! But the fact here is 200 RMB/month is barely enough to buy sufficient grains, let alone retire.

Majority of the migrant workers who are working and living in cities (200-300mln) - they are calculated as part of the urbanization rate (~67%) - are not allowed to contribute to the urban pension scheme at the place where they work and live! So if you are a Didi driver from Zhumadian in Henan working in Shanghai, making 8-10k/month, you are not allowed to contribute to the Shanghai pension scheme nor enjoy Shanghai's social services. So obviously you are not stupid and recognize that your rural 200/month retirement benefits aren't enough - so you are saving almost everything you can.

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Can you please stop talking nonsense? Who says migrant workers cannot pay social security? Did you stipulate it? In addition, rural areas have their own land and do not need to pay agricultural taxes now. They are also allowed to transfer land to companies and receive monthly income from the company. If you don’t understand, please don’t always make assumptions.

 

[Overbom]

https://twitter.com/i/web/status/1815287985254137947

Someone posted earlier that tax reform are coming, indeed tax reform are coming and local goverments should be able retain more than before

Tax reform was really the only way going forward. The central government was getting too much money while not shouldering the necessary expenses that local govs had to incur ("I am getting all the taxes, you pay for all expenses" basically)

So central gov was getting rich while local governments were drowning in debt. Add on top all those central gov directives to invest in this or that and this lack of revenues for local gov was a huge problem

Further transfer of revenues from central to local gov is a welcome change, however central gov should closely monitor and severe punish any local gov financial misconduct.

 

[Dante80]

Ok, this was funny..

https://twitter.com/i/web/status/1815620675106963812

 

[fishrubber99]

I didn't like the comment because I didn't think no restrictions were placed on migrant workers in terms of social security contributions, I did it because there is no national overarching policy when it comes to hukou restrictions, it typically depends on the individual
provinces/municipalities to implement these systems. And I don't see this system continuing to exist since there's been a consistent erosion and a policy push towards removing or loosening these restrictions in the past few years.

E.g. Zhengzhou is a city with no hukou restrictions, and Zhejiang province has no restrictions with one exception (Hangzhou, which to be fair, is the largest and wealthiest city in Zhejiang province). Cities under 3 million in population also (ostensibly) have no restrictions.

"Last year, several cities also relaxed their stringent hukou policies, making them more lenient as directed by the National Development and Reform Commission. While the central city of Zhengzhou became the first big city to remove all hukou restrictions in 2022, Shanghai started offering the permit to fresh master’s degree graduates from the city’s universities."

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