China: 20% tax burden and median wealth of $2,744

China's tax burden hovers around 20% of GDP and median wealth falls short of $7,000: the fine print behind China's economic miracle.

English · Original discussion in Spanish · Published

China: 20% tax burden and median wealth of $2,744
Taxes at 20% in China and a median wealth of $2,744

A post on X sums up the thesis in four lines: China ended poverty, has no crime, is growing faster than any other country, 90% of its population owns a home, and it has the largest universal healthcare system on the planet. All of it, the post claims, because the right has not governed the country for 80 years.

The response was long, detailed and largely numerical. Against the miracle narrative came the tax burden, median wealth, the residence permit system, the absence of pensions and the famines of the mid-20th century. It is a debate where the triumphant headline and the fine print tell different stories, and where almost nobody disputes the growth: what they dispute is the distribution.

How much tax do you pay in China, and what does the average citizen own?

The most repeated contrast is fiscal. China's tax burden stands at around 20% of GDP, while Spain's is roughly 40%. Half. For some, that lightness explains why the country can sustain an enormous state apparatus without crushing middle incomes. For others, it explains something else: without social spending, there is no need to collect so much.

The second figure is more uncomfortable. Median wealth in China ranges between $2,744 and $6,738 per person. These figures are thrown out precisely against the image of a rich country: you can have state-of-the-art skyscrapers and low typical wealth, because what matters is not total GDP but how it is distributed. The breakdown circulating online, comparing averages and medians, paints a far less epic picture than the original message.

The hukou: internal migrants without basic rights

Among the weightiest arguments is the hukou system, the residence permit that ties each person to their place of origin. Anyone who moves from the countryside to the city without that registration is cut off from basic services. The description given is harsh: it is claimed that these internal migrants live in worse conditions than in India, and that the label of "illegal immigrant" is applied within the country itself.

From there comes the other contested myth, that of healthcare. It is claimed that healthcare is paid out of pocket and that there is no public system equivalent to Europe's; that there are no pensions except for certain civil servants; that there is no unemployment benefit or social assistance; and that some companies withhold wages for two, three or even four months, precisely so that workers cannot leave for another job without losing what they are owed.

The Great Leap Forward and Deng Xiaoping's U-turn

The historical section dismantles the message's timeline. Of those 80 years, it is pointed out, during the first fifty the country was one of the most perversos in the world. The Great Leap Forward, launched between 1958 and 1962 to turn the country into an industrial power, collectivized agriculture into people's communes and had people smelting steel in backyard furnaces. The result was a monumental failure and a famine that killed tens of millions.

The takeoff came not with orthodoxy but with its partial abandonment: the market economy elements introduced after Deng Xiaoping's turnaround. It is the paradox most emphasized: the further the country moved away from the classic playbook, the better it did. And the more faithful it remained to it, the more people died of hunger.

Nationalism, one-party rule and low taxes: the parallel with Franco's Spain

There is one comparison that appears several times and is unflattering to both sides: nationalism, social control, a single party, a free economy but steered toward the benefit of the state, and a low tax burden. That cocktail, the argument goes, looks a lot like Franco's Spain and very little like what is usually understood as the left. Hence the most repeated conclusion: if those same policies were applied here, those who praise them today would say exactly the opposite.

Russia, Europe and the short-termism of democracies

The other axis of the analysis is geopolitical. China is not self-sufficient, but it has a domestic market, its own technological capacity and a strategic alliance with Russia that guarantees it hydrocarbons; the proposed parallel is with the United States of 1900. Against that, it describes a European Union that knows the situation and sustains it anyway, because its hierarchies calculate that it suits them. Managing the leftovers, it is said, yields more electoral returns than a long-term project.

Home ownership: a 70-year lease that gets renewed

As for the 90% ownership rate the original post boasts about, the fine print bites here too. Housing in China is, in practice, a state concession of about 70 years that is renewed afterwards; foreigners are only allowed to buy to live in, never to speculate. There is one detail that would unsettle anyone coming from Spain: when several Chinese citizens were told what squatting is, they could not believe it.

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And here is the figure that breaks the mold: a country that boasts more than 90% home ownership and a median wealth below $7,000. You can own a home and have almost nothing. That is, precisely, the debate the original message did not want to open.

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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (100 replies).

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