China’s Misplaced Priorities: Healthcare and consumption

            Riding in a taxi along Beijing’s Fourth Ring Road, I saw one of the city’s most impressive architectural feats, the National Stadium. The stadium was built for the 2008 Beijing Olympics and cost $423 million dollars. While still an impressive sight, the stadium sits unused most of the year. Today its primary use is not as a sports facility, but as a reminder of the Chinese government’s misplaced priorities.


            As Chinese manufacturing loses its competitive edge, transitioning to a consumption-based economy is more important than ever. To do this, China will have to convince its notoriously frugal consumers to spend and borrow more freely.

            The best way to encourage domestic consumption would be to strengthen China’s paltry social safety net. China’s frugal culture partially derives from its lack of public healthcare. When the sentence for inadequate savings in a health crisis can be death, every penny must be saved.

            China’s recent growth presents a rare opportunity to establish a robust public health infrastructure. Unfortunately, the Party has preferred to spend its windfall revenue on projects that attract international attention and make the leaders look good. The $44 billion dollars spent on the Olympics certainly attracted a lot of attention, but how much good did it actually do for the average Chinese citizen?

            China is also encouraging overinvestment in real estate development. This leads to gaudy developments like Global Centre Chengdu, a shopping mall complete with an indoor beach and artificial sun. The Chinese government promotes these developments because they attract media attention and make China look successful.

            It’s unfortunate that China finds more glory in building these attention-grabbing structures, many of which may be empty and decaying within a decade, rather than in improving the health and well-being of its citizens.

            The prospect of establishing a healthcare infrastructure that can serve a population exceeding one billion people is indeed imposing. Sometimes it’s easier to ignore the issue and instead stun the world with massive but manageable one-time projects. This easier path comes with a large risk however. When the people finally demand improvements to the health system, the growth needed to fund them will have likely already stalled.