IMF: Rural Chinese Households Spend 8.7% of Income on Healthcare, Second Only to the U.S.

The U.S. spends the biggest share of household income on healthcare. China's countryside is right behind it.

In rural China, 8.7% of disposable income goes to healthcare, second only to the United States among 20 major economies, according to research in the International Monetary Fund book Toward a New Economic Growth Model for China. The U.S. share is nearly 9.9%. Urban China ranks third at 5.4%, slightly above Canada.

The income gap behind the percentages

The shares look similar. The incomes behind them do not.

Per capita disposable income in the U.S. was $68,289 at the end of last year. China's was 43,377 yuan, around $6,400. That is more than 10 times lower.

Inside China the split is also wide. Official data accessed through Wind Information put urban disposable income at 56,502 yuan and rural income at 24,456 yuan. Urban residents earn more than twice as much as their rural counterparts.

China's countryside only officially emerged from extreme poverty in 2020.

Why the IMF says it matters for spending

The book's authors tie the healthcare burden to a bigger problem for Beijing: Chinese households save instead of spend. Yizhi Xu, an economist in the north Asia division of the IMF's Asia and Pacific Department, and Fan Zhang, the IMF's deputy resident representative in Beijing, wrote that "China's social spending is low compared with international peers, and increasing that spending would lift consumption."

They said targeted increases in government spending on health and social security in rural areas can significantly reduce rural household savings rates. They cited prefecture-level analysis for that finding.

The savings numbers track access to benefits. The authors recorded a savings rate of around 14% for rural people working in Chinese cities, versus about 6% for people holding urban hukou residency rights. Hukou status carries more social welfare benefits than migrant workers from rural areas receive.

Housing is part of the picture too. "Declining house prices in recent years continue to weigh on consumption and contribute to elevated household savings," Xu and Zhang wrote.

A provincial study points the same direction

Separate research from one of China's richer provinces shows how money can shape who gets care. A study in BMC Health Services Research by a team from Nanjing Medical University used the seventh Jiangsu National Health Service Survey, conducted in 2023. It covered 9,330 respondents: 4,245 urban and 5,085 rural.

Rural residents were hospitalized at a higher rate in the prior year than urban residents, 12.70% versus 7.73%. Urban residents reported slightly more outpatient use over two weeks, 10.79% versus 9.64%.

The researchers measured inequality with a concentration index. They found that after adjusting for medical need, rural hospitalization was significantly skewed toward wealthier residents. Urban residents showed almost no income-related imbalance. The urban index for outpatient visit frequency was -0.0221, and for hospitalization days it was -0.0057. Neither was statistically significant.

The study suggests that in the Jiangsu countryside, household wealth, not just medical need, helps determine who ends up in a hospital bed. Jiangsu is among China's most economically developed provinces and has extensive insurance coverage.

What the numbers do and do not show

The IMF is recommending more state spending as the fix, and that is the authors' position, not an established outcome. The book's findings rest on cross-country comparisons and prefecture-level analysis in China. Chinese policymakers have not been quoted accepting the recommendation, and no spending increase has been announced in the research.

The U.S. ranking is a reminder that a high share of income going to healthcare is not unique to poorer or state-light systems. America tops the list despite far higher incomes.

It is unclear whether Beijing will move rural health and social security spending toward migrants and the countryside. Closing the gap between hukou holders and migrant workers, which the IMF authors link to a savings rate more than double, is the lever their analysis points to.