According to a new IMF book on a new economic growth model for China, high healthcare costs are a major reason people in China save rather than spend. In rural China, 8.7% of disposable income goes to healthcare, second only to the US (nearly 9.9%) among 20 major economies, while urban China ranks third at 5.4%. US per capita disposable income was $68,289 at the end of last year, more than 10 times China's 43,377 yuan (around $6,400), and urban disposable income was more than twice rural income (56,502 yuan versus 24,456 yuan). The IMF said targeted increases in government health and social security spending in rural areas could significantly reduce household savings rates, which are about 14% for rural migrants working in cities and about 6% for urban hukou holders. It also noted that falling house prices are weighing on consumption and keeping household savings elevated.
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