I recently came across a set of data that’s quite interesting—by 2025, our per capita GDP will be about $13,953. Comparing it to Japan’s historical data, it’s roughly equivalent to Japan’s level around 1985-1986.

That period was a turning point for Japan. The United States at the time pressured Japan, leading to the signing of the Plaza Accord, after which the yen appreciated nearly threefold against the dollar over ten years. Look at how Japan’s per capita GDP surged from 1985 to 1995—that was a real boom. By 1995, Japan’s total GDP relative to the U.S. hit a historic low of only 72%.

What about our current situation? Last year, China’s GDP as a percentage of the U.S. was 64.1%, with a peak of 76% in 2021. But if we look at per capita disposable income, last year it just crossed $6,000 domestically, which is comparable to Japan in the late 1970s.

Here’s the interesting part—why is it that, even though we’re benchmarking against Japan’s per capita GDP, the corresponding years for per capita income are different? The reason is simple: our per capita income accounts for a very small proportion of per capita GDP. Not only is it below international levels, but it’s even lower than the level in the 1980s (when this ratio exceeded 60%, indicating people received a larger share of GDP).

This leads to a key issue—household consumption expenditure has been below 30% for six consecutive years, whereas in the 1980s, this figure once exceeded 50%. Even more concerning is the ratio of per capita debt to income, which remains high and is decreasing at a painfully slow rate. This suggests that a significant portion of the actual per capita income is inflated—people are using it to pay off debt.

So the logic is clear: on one hand, the share of GDP that people get is smaller; on the other hand, the debt borrowed earlier (used to fill the GDP gap) is larger. Naturally, the tax base feedback becomes weaker. Last year, the ratio of tax revenue to GDP hit a new low of only 12.6%, indicating that the quality of GDP is a more serious problem than its quantity. This aligns with the conclusions of the central bank’s survey report.

Compared to Japan’s historical per capita GDP trajectory, what we’re facing now is not just a matter of numerical benchmarking but also issues of structure and distribution. Without high-return asset opportunities, residents are forced to cut consumption to pay off debt—that’s the fundamental logic behind weak consumption.