Beijing wants to invest in people – but not too much
In February, we flagged an idea we thought would get a lot of attention in the 15th Five-Year Plan (FYP) – “investing in people.”
- We theorized that increased discussion of the concept in Party publications signaled an imminent expansion of welfare.
Were we right?
- Kind of.
Some context: Xi Jinping first used the expression in 2023 to flag the importance of education and training in raising productivity.
- Since then, the concept has evolved to include increased spending on childcare, aged care, and healthcare.
The FYP included a bunch of goals focused on investing in people.
On education, Beijing is committed to:
- Building 1000 new high schools and 500 vocational schools
- Expanding undergraduate enrollment at China’s top universities – a group of about 150 institutions designated as “double first-class” – by 100,000 students
Elsewhere, the FYP is targeting:
- A six percentage point increase in childcare enrollment rates among children under three years
- An increase in the proportion of nursing care beds (relative to standard residential care beds) in aged care institutions from 68% to 73%
- A 20% expansion in the number of practicing doctors and registered nurses
Get smart: We thought Beijing might be willing to invest in people the same way it invests in infrastructure – with debt.
- It isn’t.
Get smarter: These changes represent an expansion of welfare and public services, albeit on a tiny scale.
- Weak tax revenue – which grew only 0.8% last year – limits China’s capacity to do more.
Our take: Until Beijing puts up some real money, “investing in people” will remain a slogan.