I think that is just a small side of a big city in China. In fact, China has many places where there are poor people. We should not just look at one aspect of the whole country.
That is right. The fact that China has a very high GDP is just because of its production sector and huge exports and this sector is run by labors that get minimum wages.
I do agree that there might be allowances given by the government but the GDP per capita is exaggerated for not all the people have the similar income and the richest of them are over masking the poor. SO it is not very easy to completely shift to the cashless society.