But once you get past this, while Chinese social insurance is a form of supplemental income, it's not enough, and it does put Chinese into the bind of having their children provide for most things in their old age, which in turn makes the majority of Chinese marriages an economic arrangement wherein the husband agrees to pay for the living costs for his wife's parents AND his own.

Incidentally, these generational transfer payments are not one-sided. Parents usually provide for the majority of their children's educational expenses (scholarships don't) and middle- to upper-class Chinese will buy a house for their children. For the Chinese government to effectively break open this piggy bank as the Times endorses would require pretty massive handouts.

As for improving consumption, Wen Jiabao has made this a goal in recent years, though the biggest problem is the need to balance increased consumption (lower taxes and interest rates to increase consumer spending) and development of the economy in the Chinese periphery (which arguably requires more taxes and higher interest rates, the former for infrastructure development and the latter to create the capital pool needed for loans to fledgling businesses in the countryside).

Money is flowing into the economy, and a lot of it is going down to the local Chinese (who save it), and to the banks (which reinvest it in other countries). Now, if all that money was flowing in the Chinese economy, wouldn't that cause a serious rise in the amount of currency in China, risking inflation?