Rural Chinese households spend 8.7% of income on healthcare, nearing Americans' 9.9%

People in China are spending nearly as much of their income as Americans on healthcare, according to a new IMF report released this month. The study, titled *Toward a New Economic Growth Model for China*, shows that rural households spend 8.7 % of their disposable income on medical costs, just behind the United States, which spends about 9.9 %. Urban residents in China follow at 5.4 %, ranking third among 20 major economies.

The high cost of care has become a pressing issue as China continues its transition from a largely rural, low‑income society to a more urbanized economy. Rural China lifted itself out of extreme poverty in 2020, but many households still face limited savings and high out‑of‑pocket expenses. In contrast, the U.S. per‑capita disposable income was $68,289 last year, more than ten times the $6,400 that rural Chinese households earn in U.S. dollar terms. This disparity underscores the heavy burden of health spending on China’s lower‑income groups.

Income gaps within China further explain the savings patterns. Rural incomes average 24,456 yuan, while urban incomes reach 56,502 yuan, according to official data. Rural workers who migrate to cities save about 14 % of their earnings, whereas urban residents with local hukou status save only 6 %. The IMF notes that falling house prices have also dampened consumption, pushing households to save more as a buffer against economic uncertainty.

The IMF recommends that China increase spending on health and social security, especially in rural areas, to ease the savings pressure and stimulate consumption. By raising public support, the government could lower the need for households to set aside large portions of their income for medical costs. This shift would help balance China’s growth model, encouraging a healthier, more resilient economy that supports both urban and rural citizens.