I'm not convinced that China's state-owned enterprises are a useful proxy for basic income.

Why not? The people employed by these SEO get income (for doing nothing of value to the country). These people arguably are not being able to be productive otherwise because they're stuck in an old industry and their skills are obsolete as such. If left to their own devices, without SEO income, they're likely on the streets and massive unemployment. It's not far off to say that the SEO employees are in a "special kind" of unemployment benefit.

Exactly the kinds of people BI are supposed to help.

So why won't it be a proxy?

In what sense? Basic income is continually replenishes the economy with fresh money, lessening the role of unstable credit. That's not what's happening in China.

Until it explodes (which hasn't yet and may not for another 60 years!), China is continuously replenishing SEO loans. It's fresh money to the economy if they are spent. The retail vendor accepting SEO earned yuan couldn't tell the different between that and the non-SEO yuan. So it's effect in the economy is approximately what your BI/GD seeks out to do.

Yes on the surface, the difference may appear that in a debt driven approach, China may have a credit event in the future, and GD driven approach doesn't -- but I think it does, in a different way.

The essence of what I'm about to say is highlighted by finance professor Michael Pettis blog entry "Thin air money isn't created out of thin air" "http://blog.mpettis.com/2015/10/how-to-spend-thin-airs-endog...

Jumping to the most relevant parts, I quote:

In the second case, assume the other extreme, in which the economy has a tremendous amount of slack – there are plenty of unemployed workers who have all the skills we might need and can get to work at no cost, factories are operating at well below capacity and they can be mobilized at a flick of the switch, and there is enough unutilized infrastructure to satisfy any increase in economic activity.
In this case when loan creation or deficit spending creates demand “out of thin air”, in other words, it also creates its own supply. When Thin Air spends money to buy certain goods or services, those goods and services are automatically created by switching on the factory equipment and putting unemployed workers to work.

There is also a multiplier at work here. Assume that Thin Air’s spending is for investment, and that it plans to acquire $100 of goods and services for investment purposes. Because it has no need to build capacity or acquire inventory, the full expenditures will go towards paying wages. Let us further assume that the newly hired workers save one-quarter of their income.

As Thin Air pays wages, the workers will spend 75% of those wages on their own consumption, and they will save 25%. Their own consumption will require the production of additional goods and services, which will require hiring more workers. In order that Thin Air acquire $100 of goods and services, it can easily be shown that the total expenditures of Thin Air and of consuming workers will be the original $100 divided by the 25% savings rate,

(This is the important part)
so that in the end GDP will rise by $400, consisting of $300 additional consumption and $100 additional investment. Because the increase in GDP exceeds the increase in consumption by $100, total savings will have risen by $100.

In an economy with enough slack to absorb Thin Air’s investment fully, in other words, the investment creates enough of a boost in the total production of goods and services that it becomes self-financing – it increases savings by the same amount as it increases investment. Notice then, once again, that at no point is the identity between savings and investment ever violated.

(And the point that addresses the core:)

In reality no economy will ever have zero slack, as in the first case, or full slack, as in the second, but instead will exist in some combination of the two. In that case Thin Air’s demand created “out of thin air” will partly be met by suppressing demand or investment elsewhere within the economy, and partly by creating the larger amount of goods and services needed to satisfy the increased demand.

If you study the rest, it basically means that GD/BI will invariably compete with traditional investment, savings and demand. It MUST.

With a economic effect multiplier of 300%, any slack will be absorbed so quickly, that unless GD/BI stops, it will start eating into productive-economy's GDP. If there is a BI, it cannot be allowed to get very big, certainly cannot be viral.