Chinese Economics Thread

[fishrubber99]

For the people getting 8500/month, yes its a joke to call it 'weak'.

But for the 180mln people getting 200 rmb/month, I'd love for anyone to come up with a thesis as to how it is sufficient.

180 mln people basically get this unconditionally as it requires no contributions and it's stackable with other local welfare and social service provisions like 低保. It has an income replacement rate of about 10% which is fairly low.

So if you were to compare this to programs in other countries, the OAS in Canada is probably a close equivalent (with up to $750 CAD being paid per month) that applies to low income individuals. Doing napkin math, the Canadian program has a replacement rate of roughly 30% if the person made a pre-retirement income of $27k (although this is means tested and payments are reduced based on how high your income is). So China isn't that far off of the basic old age living allowance of poor seniors in a relatively developed country like Canada if they just triple the payout (scaled with income growth) of the basic pension plan over the course of the next few years.

 

[abenomics12345]

180 mln people basically get this unconditionally as it requires no contributions and it's stackable with other local welfare and social service provisions like 低保. It has an income replacement rate of about 10% which is fairly low.

So if you were to compare this to programs in other countries, the OAS in Canada is probably a close equivalent (with up to $750 CAD being paid per month) that applies to low income individuals. Doing napkin math, the Canadian program has a replacement rate of roughly 30% if the person made a pre-retirement income of $27k (although this is means tested and payments are reduced based on how high your income is). So China isn't that far off of the basic old age living allowance of poor seniors in a relatively developed country like Canada if they just triple the payout (scaled with income growth) of the basic pension plan over the course of the next few years.

Technically, the 180mln include rural residents, many of whom were farmers and these people were taxed agricultural tax until its removal in 2006 and they also technically sold agricultural products at below-market prices to the government so its not entirely accurate to suggest they 'didn't contribute' anything. Their in-kind contribution to building the country has been quite substantial.

If we used the Canadian example you outlined, OAS is clawed back above a certain income. Additionally, the 8500/month received by the government workers in China is actually above the maximum CPP payout (and this is just nominal, if you apply the purchasing power equivalent it would be significantly higher). Also, prior to 2015 government workers in China didn't even need to contribute to the program.

So the issue here, as you can tell, is the inequality.

 

[Michael90]

. I mean every other east asian country managed to make it into high income. Its harder and will take longer since China is so big and has a lot of catchup but there's no structural reason it cannot achieve something like that.

Agree, I think this is the most important part. All East Asian countries are developed countries and they are the only ones outside the West who have really achieved that so far. So i don’t think it’s rational to expect China not to be able to do so. China will be an abnormally if they can’t achieve the same thing as their East Asian peers. So even a pessimistic person should expect China to achieve a similar level of development to her East Asian peers regardless of what kind of politics China follows. After all, Chinas peers in east Asia are not smarter or special than China . So no reason they can’t also achieve that. So China will
Definitely overcome the middle income trap and be a developed country as a whole this coming decades.

 

[doggydogdo]

For the people getting 8500/month, yes its a joke to call it 'weak'.

But for the 180mln people getting 200 rmb/month, I'd love for anyone to come up with a thesis as to how it is sufficient.

Sufficient for what? Survival? Their life expectancy is a bit higher than US's right now (and significantly above most of the worlds) so I would say they are doing fine on that front.

Also, it's going to cost too much. let's say they pay 1000 USD to them each year, that would cost the government 180 000 000 000 dollars a year which is as much as the military. Considering the number of Chinese retirees is going to grow faster from now on I don't think it's a good idea to get in debt now instead of saving for the future. You are the one always complaining about Chinese debt, I'm not sure why you support giving out free welfare money to Chinese which have strong family support system and free land.

 

[GulfLander]

https://twitter.com/i/web/status/1996739295353491682

 

[BlackWindMnt]

The definition of high income needs to be adjusted accordingly, as more population moves into high income.

That's why china will rugpull everyone from high income into the medium income bracket over time.

 

[abenomics12345]

Sufficient for what? Survival? Their life expectancy is a bit higher than US's right now (and significantly above most of the worlds) so I would say they are doing fine on that front.

Complete and utter non sequitur.

What does paying more equitable pensions have anything to do with life expectancy in the US? I don't compare the economic progress of China to a falling empire. Why are you so insecure as to have to "compare" with the US? Are Chinese people only supposed to live in comparison to how Americans live? Is reaching American 'prosperity' the end all be all of Chinese economic progress?

Also I love how you are okay with paying government worker retirees 8500 but not okay with paying some more for rural residents. Check your biases.

let's say they pay 1000 USD to them each year

Complete strawman. Why is measurement in USD useful or appropriate? Why is it 1000 USD? Why not 500? 750? Or 5000?

CAD was used in previous examples because it was a measurement of a % of replacement income. I thought we are supposed to see RMB appreciate so explain why you believe USD is the correct measurement - unless of course you are supportive of maintenance of a USD hegemony over China.

You are the one always complaining about Chinese debt,

You have no idea what I've said so stop projecting:

The central government has ample capacity to take on additional debt

Keep in mind, no government in the entire world, has ever paid off a single cent of debt - it is refinanced and rolled over - the critical thing is that GDP grows in-line or faster than debt growth - deleveraging can come from paying off debt (no government has ever done this), or growing the earnings (GDP).

No government has ever paid off any debt. Lol.

 

[doggydogdo]

Complete and utter non sequitur.

What does paying more equitable pensions have anything to do with life expectancy in the US? I don't compare the economic progress of China to a falling empire. Why are you so insecure as to have to "compare" with the US? Are Chinese people only supposed to live in comparison to how Americans live? Is reaching American 'prosperity' the end all be all of Chinese economic progress?

Also I love how you are okay with paying government worker retirees 8500 but not okay with paying some more for rural residents. Check your biases.

Life expectancy of the US is higher above world average, also government workers did buy into retirement unlike rural residents which gets them for free despite not getting into retirement.

Complete strawman. Why is measurement in USD useful or appropriate? Why is it 1000 USD? Why not 500? 750? Or 5000?

CAD was used in previous examples because it was a measurement of a % of replacement income. I thought we are supposed to see RMB appreciate so explain why you believe USD is the correct measurement - unless of course you are supportive of maintenance of a USD hegemony over China.

You are really mad i used USD huh? you know u could convert that back to RMB if u wanted right?

You have no idea what I've said so stop projecting:

You are always complaining about deflation because of debt. stop lying

 

[abenomics12345]

also government workers did buy into retirement

Your reading comprehension is literally worse than average Americans.

Civil servants did not contribute anything before 2015 - meaning vast majority of retirees today did not contribute much if at all anything. I would get into actuarial calculations but you wouldn't possibly understand.

Again, if you bothered to read, it's in the actual report.

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You are always complaining about deflation because of debt. stop lying

I quoted exactly what I wrote - you are the one who again, cannot read.

By the way, this is how stupid your argument is:

You think it is too costly to pay 7000 RMB/year (583 RMB/month) vs. 200 RMB month. An incremental 383 RMB/month. (583-200 = 383 in case you can't math either).

On the other hand you seem perfectly happy for the government to subsidize 38% of the 8500 RMB/month for civil servants (3230 RMB/month).

If you did any math, you would realize that at this point in time, fiscal subsidy for 17 million public retirees (662bln RMB/year) - some of the richest Chinese people, is bigger than for the 180 million Resident retirees (433bln RMB/yr), some of the poorest Chinese people.

 

[doggydogdo]

Your reading comprehension is literally worse than average Americans.

Civil servants did not contribute anything before 2015 - meaning vast majority of retirees today did not contribute much if at all anything. I would get into actuarial calculations but you wouldn't possibly understand.

Again, if you bothered to read, it's in the actual report.

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View attachment 165854

No individual contributions mean it's already factored in and deducted from wages.

I quoted exactly what I wrote - you are the one who again, cannot read. Reality disagrees with your opinions so I suggest you change your opinions.

Dude idk what you get out of lying but everyone knows u constantly complain about the deflation because of it makes it harder to pay off debt.