China eyes great welfare leap forward

In February, China’s President Xi Jinping announced a large and bold plan for a nationwide basically all-encompassing welfare system, arguing it is a crucial issue for state stability. It is a correct assessment because if there is no social security there will be a potential army with nothing to lose that will feel cast out from the general prosperity and will destabilize the country. Yet the announcement didn’t specify how all of this will be financed, especially since total state debt – central and local governments plus state-owned enterprises (SOE) debt – may well be more than four times China’s gross domestic product (GDP.)

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