It is my view that this is China's answer to Universal Basic Income (UBI). Since many jobs will be replaced by automation, (a trend which will affect all economies in the coming decade) the Chinese government needs a way to provide monthly income to the growing population who no longer have jobs.
By providing people with direct income from the government on a monthly basis, it provides them with income without going deeper into debt. The problem the US experienced is that by rescuing banks, it made banks richer, but since they were lending money, for consumers, this money always ended up as debt. If the income comes directly from the government though, they do NOT go deeper into debt.
In rapidly changing times, this is very important because it provides them with income to cover their basic living costs without going into debt.
It is my view that this is China's answer to Universal Basic Income (UBI). Since many jobs will be replaced by automation, (a trend which will affect all economies in the coming decade) the Chinese government needs a way to provide monthly income to the growing population who no longer have jobs.
By providing people with direct income from the government on a monthly basis, it provides them with income without going deeper into debt. The problem the US experienced is that by rescuing banks, it made banks richer, but since they were lending money, for consumers, this money always ended up as debt. If the income comes directly from the government though, they do NOT go deeper into debt.
In rapidly changing times, this is very important because it provides them with income to cover their basic living costs without going into debt.