To Achieve ‘Common Prosperity,’ Xi Jinping Seeks to Scale China’s ‘Three Big Mountains’
The rising costs to Chinese households of education, healthcare and housing are campaign’s focus
By Jonathan Cheng
Chinese leader Xi Jinping’s ‘common prosperity’ campaign follows four decades of economic expansion that widened the gap between the urban rich and poorer countryside. QILAI SHEN/BLOOMBERG NEWSBEIJING—After decades of prioritizing economic growth, Chinese leaders have recently focused their efforts on overhauling the education and housing sectors.
Looming behind those efforts are what many in China call the “three big mountains.”
The term—a modern-day twist on a phrase Communist revolutionaries used to refer to the evils of imperialism, feudalism and crony capitalism—has been invoked for years in China to describe the costs associated with housing, education and healthcare.
Concerns about the costs of those sectors for households are hardly unique to China, and would be familiar to many American families.
But after four decades of explosive economic expansion that widened the gap between the largely urban rich and the far-poorer countryside, leader Xi Jinping has put these livelihood issues at the center of his “common prosperity” campaign to shore up the Communist Party’s legitimacy as a protector of the underclass and stave off social instability.
Chinese authorities have imposed measures aimed at taming the roaring housing market, imposed stringent restrictions on its once-booming tutoring industry and laid out a plan to improve healthcare.
The effort to tackle some of the country’s most intractable livelihood issues could, if successful, strengthen Mr. Xi’s widely expected bid to break with precedent and seek a third term later this year.
When China was still a fully planned economy, the state aimed to fulfill the basic needs of society from cradle to grave.
But Chinese leaders, dissatisfied with inadequate government services and looking to unleash entrepreneurial energies, began opening them up to private capital.
While that shift has dramatically lifted living standards over the past four decades, it also sent costs of the three mountains spiraling out of reach for many people, contributing to plunging birthrates.
Like many of his friends, Huang Zhuang, a 28-year-old working professional in Beijing, says even the idea of starting a family fills him with dread when he considers the costs of housing, education and healthcare.
The choice, Mr. Huang says: “Not to have a child at all, or have just one at an older age.”
Here’s a closer look at each of the three big mountains:
As competition has intensified for scarce slots at China’s elite universities, anxious Chinese parents in recent years fueled an arms race in private tutoring services for their children, driving up education costs for many households.
In China’s biggest cities, parents also bid up housing prices in districts that are home to the most sought-after schools.
A 2020 survey by Shanghai’s state-backed consumer-protection group found that in Beijing, Shanghai and Shenzhen, 78.4% of families with children ages 4 to 17 years old had participated in after-school tutoring.
Students and parents leave a private after-school education session in Beijing last summer. / PHOTO: NOEL CELIS/AGENCE FRANCE-PRESSE/GETTY IMAGESA survey conducted in 2019 by Tencent Holdings Ltd. , the country’s most valuable technology company and a backer of educational startups, found during the summer vacation alone and across 28 Chinese cities that 44% of families with precollege children—including those in preschool—spent roughly one-third or more of their household income for those months on their children’s education; 12% said they spent half their income or more.
While more than 95% of China’s population enjoys some form of government-backed health insurance, many still struggle to afford quality healthcare.
Rural residents also tend to receive far less coverage than their urban counterparts.
The burden can be exorbitant for those with serious or chronic diseases such as cancer and diabetes, sending many into poverty.
China’s government said in 2020 that it had lifted out of poverty 10 million people who had been financially ruined by medical bills.
A relatively weak network of general practitioners and family doctors in the country has pushed patients with simple ailments such as fevers and headaches to hospitals, rather than community clinics where the cost of care is far lower.
With only minimal government funding, public hospitals—which provide the lion’s share of healthcare services in China—are motivated to profit from charging patients for unnecessary prescriptions and services with inflated pricing, according to a report issued by China’s legislature in 2018.
A pharmacy customer in Harbin, in northeast China; a Chinese government report found hospital patients are sometimes charged for unnecessary prescriptions. / PHOTO: ZHANG TAO/XINHUA/GETTY IMAGESThe costs are even higher for people living in rural areas and smaller cities, who often travel to big cities and the country’s more prosperous coastal regions, where most of China’s top-notch hospitals are concentrated.
In 2021, Beijing released a five-year plan to upgrade its healthcare sector.
Officials have vowed to lower medical costs for people with serious health conditions.
China’s property market, the largest of the three big mountains, has grown exponentially since the 1990s, when state-run enterprises still provided the bulk of housing for China’s urban population.
The liberalizing of the market alleviated widespread housing shortages—and unleashed one of the world’s biggest real estate booms.
Research by the state-run Chinese Academy of Social Sciences shows that, by 2019, average home values in China’s cities rose to 9.1 times average annual income.
In comparison, median home values were four times median incomes in the U.S. and Canada in 2019, and six times incomes in Australia, according to a report last year by two Canadian think tanks, the Urban Reform Institute and the Centre for Public Policy.
Many families moving to bigger cities in search of economic opportunity have been saddled with debt.
By the end of 2020, housing loans had helped drive the average household’s debt level to 130.9% of its disposable income, according to the Shanghai University of Finance and Economics—effectively equal to the U.S. peak of 133% in 2007, before the subprime mortgage crisis.
The Cloud Atlas housing property, in Shanghai; the liberalizing of China’s housing sector unleashed a real estate boom and led many families to become saddled with debt. / PHOTO: QILAI SHEN/BLOOMBERG NEWS—Xiao Xiao contributed to this article.
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