Comparative Analysis of Fiscal Sustainability of China and the us
National Academy of Economic Strategy, Chinese Academy of Social Sciences
Abstract: The fiscal sustainability of China and the United States is of major concern globally. Based on comparative data analysis, this paper reveals that the government
debt level of both countries is within the normal range. Robust growth prospects of both countries will also vigorously support their future mitigation of government debt level. Comparatively speaking, Chinas government debt level is healthy and, despite extensive concerns, even its local government debt is not very high. The assessment that China may encounter a crisis is not supported by evidence. Yet in the long run, both countries will face pressures from increased fiscal spending on elder care and healthcare stemming from an ageing population, which will threaten their fiscal sustainability. These challenges require both countries to speed up reforms of elder care and healthcare. Specifically, China needs to focus on elder care reforms and the US should attach more importance to healthcare reforms.
Keywords: fiscal sustainability, debt level, pension insurance, healthcare JEL classification: H72; H63; H75
DOl: 1 0.19602/j .chinaeconomist.20 17.04.03