Healthcare workers care for newborns at a hospital in Qianxi, Guizhou Province, on January 29 (XINHUA)

In the city of Ningbo, Zhejiang Province, the local government has earmarked 10 percent of its annual budget specifically for public services for migrant workers, covering their housing, education and vocational training.

This initiative has not only improved the lives of migrant workers, but also triggered a ripple effect in the local economy courtesy of their stable employment and consumption. The investment's impact on GDP growth once achieved a one-to-one ratio, with multiplier effects in the years to come.

This model has allowed Ningbo to boost its fiscal revenue while simultaneously fostering broader urban development, Li Daokui, Director of the Academic Center for Chinese Economic Practice and Thinking at Tsinghua University, raised the example at the China Development Forum 2025 in Beijing on March 23.

Li described Ningbo's example as a clear illustration of the concept of "investing in people," which was introduced for the first time in this year's government work report delivered by Premier Li Qiang at the opening meeting of the Third Session of the 14th National People's Congress, China's top legislature, in Beijing on March 5.

The annual meetings of the NPC and the National Committee of the Chinese People's Political Consultative Conference (CPPCC), the country's top political advisory body, are popularly known as the Two Sessions, where key political and economic policies are discussed and decided upon, shaping the country's governance and development for the year ahead and beyond. This year's NPC and CPPCC National Committee sessions took place from March 5 to 11 and March 4 to 10, respectively.

The report said more funds and resources will be used to serve the people and meet their needs. This will help create more jobs, increase people's incomes and reduce their burdens, and provide more incentives to stimulate consumption, thus promoting the positive interplay between economic growth and improvements in people's lives.

"The inclusion of this concept in the government work report is extremely important, signaling a strong shift in public spending and policies toward improving people's wellbeing," Li said. "It will be the core driver of future economic growth."

Traditionally, "investing in things" is China's major policy priority, which refers to allocating funds toward physical infrastructure, such as building factories, purchasing equipment, or constructing roads and bridges. Investing in people, however, focuses on directing financial and other resources toward human development. Input in areas such as education, healthcare and skills training is essential for enhancing the quality of workforce and providing lasting momentum for economic transformation, he added.

A lifelong investment 

"At its core, pushing for more funds and resources to be invested in people is about using government money to benefit the public," Han Baojiang, a professor at the Party School of the Communist Party of China Central Committee (National Academy of Governance) and a member of the 14th CPPCC National Committee, said.

This year's government work report proposed pro-fertility measures including to formulate policies on boosting birth rates, provide childcare subsidies, develop more integrated nursery and childcare services, and increase non-profit childcare services.

"Behind the phenomena of a 'reluctance to have children' and a 'fear of having children,' the burden of early childhood care is a widespread and unavoidable issue," Zhao Haiying, a member of the Financial and Economic Affairs Committee of the NPC, said.

At the national level, the establishment of a childcare subsidy system has been outlined, though specific amounts are yet to be determined. However, some local governments have already begun exploring this initiative. For example, the government of Hohhot, Inner Mongolia Autonomous Region, announced on March 13 that starting from March 1, families who legally give birth will receive a childcare subsidy of 10,000 yuan ($1,377) for their first child, 50,000 yuan ($6,885) for their second child, and 100,000 yuan ($13,770) for their third child or beyond, provided they meet certain conditions.

The report also said government subsidies for basic medical insurance for rural and non-working urban residents will be raised by a further 30 yuan ($4) per person, and subsidies for basic public health services will be increased by 5 yuan ($0.7) per person.

This means that this year, the per-capita fiscal subsidy for basic public health services in China reaches 99 yuan ($14). The national basic public health service program was launched in 2009, with the per-capita fiscal subsidy starting at 15 yuan ($2) in 2010. It covers vaccinations for children, free screenings for cervical and breast cancer for women, and annual free health check-ups for elderly residents.

Regarding the elderly, the report indicated that the government will raise the minimum basic old-age benefits for rural and non-working urban residents by 20 yuan ($3) and will also increase the basic pension benefits for retirees.

With this adjustment, the minimum basic pension for both urban and rural residents will go up from 123 yuan ($17) per month in 2024 to 143 yuan ($20) per month. This denotes a consecutive rise of 20 yuan ($3) over two years, which is double the previous annual average increase of 10 yuan ($1.5). 

This adjustment will directly benefit over 540 million urban and rural residents enrolled in pension insurance, with particular significance for rural residents and low-income elderly individuals.

According to data from China's National Bureau of Statistics, the country's population aged 60 and above had reached 310 million as of 2024, accounting for 22 percent of the total population. A report released earlier this year on the development of China's silver economy, which refers to the economic opportunities and markets that arise from the aging population, also predicted that between 2014 and 2050, the consumption potential of China's senior population will grow from around 4 trillion yuan ($551 billion) to approximately 106 trillion yuan ($1.5 trillion).

The insufficient supply of elderly care services has caused the trillion-dollar silver economy demand to remain underdeveloped. "The current acceleration of population aging has led to a growing demand for senior care services, while the role of family-based care has generally weakened. This makes addressing the needs of basic elderly care services an urgent priority," Zheng Gongcheng, a member of the NPC Standing Committee and President of the China Association of Social Security, said.

From increasing pensions to instituting insurance schemes for long-term care, from advancing smart elderly care to creating reemployment opportunities for seniors, China has outlined a roadmap for elderly care reform. This not only concerns the wellbeing of the more than 300 million elderly citizens but also represents an "effective investment" that boosts domestic demand because when the silver economy expands from basic medical needs to more and diverse sectors—including culture, tourism and technology—China's economy will see a consumption boom.

A meaningful method 

Population aging will lead to a gradual decrease in the growth of the nation's labor supply, but economic development is not just about the quantity of labor—it's about the quality of effective labor, Justin Yifu Lin, Dean of the Institute of New Structural Economics at Peking University and a member of the Standing Committee of the CPPCC National Committee, told China News Service.

Effective labor is the combination of the workforce and their level of education. Investing in people can improve education and health, thereby increasing the amount of effective labor, according to Lin.

In the past, China's demographic dividend was driven by the "quantitative expansion" of its labor force. Today, the goal is to create a new demographic dividend by focusing on "quality improvement," he said.

Yang Zhiyong, President of the Chinese Academy of Fiscal Sciences (CAFS), told China News Service that the transition from a previous focus on "investing in things" to the current and future emphasis on "investing in people" shows a distinct characteristic of the stage of economic development.

Investing in people does not necessarily oppose investing in things, according to former President of the CAFS Liu Shangxi. He stressed that the two should be integrated. Investment in things serves as a means, with the ultimate goal of benefiting people and creating new drivers of economic growth by improving people's wellbeing. This integration is essential for driving high-quality development. BR

(Print Edition: The Human Touch) 

Copyedited by Elsbeth van Paridon 

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