A slump exposes holes in China’s welfare state

CHINA OR AMERICA: which is the land of rugged self-reliance and which of the government handout? Judging by support for people on low incomes amid the coronavirus crisis, the answer is surprising. America has dramatically scaled up benefits for those out of work. Its federal stimulus has allocated an extra $600 a week to each jobless person—enough, on average, to replace 100% of lost income. The Chinese government, meanwhile, has given an extra 12 yuan ($1.70) a week to its poor. That is enough for a daily bowl of noodles.

Those on the margins in China have no choice but to fend for themselves. Lei Yankun was stuck for three months in Hubei province, where the coronavirus outbreak began. Unable to return to his job at an electronics factory, he topped up his savings by harvesting bamboo shoots in the mountains. Li Quanyou, a grey-haired construction worker, went to Shanghai in search of work, but after three fruitless weeks took a 16-hour train ride home, carrying his clothes in a large plastic bucket, to wait out the downturn. Miao Wenjiang, a driver in Anhui province, eliminated his one luxury—weekly meals for his family at KFC—as his earnings dwindled.

The economic pain that China is suffering as a result of covid-19 is common to many countries. What makes it unusual is the contrast between China’s world-class...