Yesterday I was reading an article in the Wall Street Journal about General Electric opening an overseas headquarters in China. The article is behind a pay wall so I can’t link it here but as with all WSJ articles you can google the headline: GE Bases X-Ray Unit in China to read the whole thing for free. The article wasn’t anything special until I read the throwaway line in the last paragraph:
China’s central government increased its budget for spending on public health by 16% this year to $26 billion. In March, it allocated 76 billion yuan ($11.78 billion) to improving health-insurance coverage and increased insurance subsidies to 200 yuan a person, up from 120 yuan.
China only spends $26 billion on public healthcare? Really? That is less than $26 a piece. Assuming the WSJ reporter is correct that would mean China spends about 1/3rd of one percent of their $7.8 trillion gross domestic product on healthcare. No wonder China can afford to waste hundreds of billions of dollars on high speed trains that don’t run in thunderstorms and shiny new ghost towns.
For comparison’s sake the Congressional Budget Office says that the United States Government is currently spending just less than 6% of our entire GDP on healthcare and that is when you only include ” the major mandatory health care programs”. That means the U. S. spends about $857 billion or more than $2800 per citizen on just the “major mandatory healthcare programs”.
So how does China afford all those expensive trains? Obviously one way they can afford it is by spending less than 1/1000th of what we do on government healthcare programs.