Children and adults receive vaccinations at the Jiangbei Community Health Service Center on September 15, 2026 in Huizhou, Guangdong province of China.
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BEIJING — High healthcare costs are a big factor driving people in China to save, rather than spend, their money, the International Monetary Fund pointed out in a new book titled “Toward a New Economic Growth Model for China.”
In rural China, 8.7% of disposable income is spent on healthcare — just second to the U.S. among 20 major economies, the research found. The U.S. ranks the highest in the world with nearly 9.9% of disposable income spent on healthcare.
Urban China ranks third, at 5.4%, slightly more than Canada, the data showed.
The level of the healthcare burden in China grows starker when considering per capita disposable income in the U.S. was $68,289 as of the end of last year — more than 10 times more than China’s 43,377 yuan in U.S. dollar terms (around $6,400).
The gap widens further when looking at China’s countryside, which only officially emerged from extreme poverty in 2020.
Urban China recorded more than twice the disposable income as rural areas, at 56,502 yuan versus 24,456 yuan, according to official data accessed via Wind Information.
Targeted measures to raise government spending on health and social security in rural areas can significantly reduce the savings rate in rural households, the IMF said, citing prefecture-level analysis.
“China’s social spending is low compared with international peers, and increasing that spending would lift consumption,” wrote Yizhi Xu, economist in the north Asia division of the IMF’s Asia and Pacific Department, and Fan Zhang, the IMF’s deputy resident representative in Beijing.
They recorded a savings rate of around 14% for people from rural areas working in China’s cities, and about 6% for people with urban “hukou” residency rights, which give them more social welfare benefits than migrant workers from rural areas.
“Declining house prices in recent years continue to weigh on consumption and contribute to elevated household savings,” Xu and Zhang wrote in their section of the IMF book.
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