China is second only to the U.S. in healthcare costs as a percentage of income

A new IMF study finds that Chinese households bear one of the heaviest healthcare burdens among major economies, second only to the U.S. when healthcare spending is measured as a share of disposable income. Rural Chinese households spend about 8.7% of disposable income on healthcare (U.S. nearly 9.9%), while urban households spend about 5.4%, slightly above Canada. The strain is amplified by large per-capita income gaps: U.S. disposable income was roughly $68,289 last year versus about 43,377 yuan (roughly $6,400) in China, and urban disposable income (56,502 yuan) is more than double rural (24,456 yuan). Rural areas only recently emerged from extreme poverty, leaving healthcare costs disproportionately large relative to incomes.

The IMF links high out-of-pocket health costs and weak social protection to elevated household saving and subdued consumption. Prefecture-level analysis shows rural migrants working in cities save around 14% of income versus about 6% for urban hukou holders who receive stronger benefits. The study recommends boosting government spending on health and social security, especially in rural areas, to reduce precautionary saving and lift consumption; declining house prices also continue to depress spending and sustain high savings.