In a new article published by the Milken Institute Review, APARC Deputy Director and Asia Health Policy Program Director Karen Eggleston offers an overview of the successes of China’s health reforms and the challenges ahead if the country is to increase the efficiency of health care delivery as it expands quality and usage.

Creating a high-quality universal health care system is an immense challenge anywhere, let alone in a country as large and diverse as China. But equal access to care will become ever more important as China converges on higher incomes, slower economic growth, population aging, and dependence on a skilled workforce to approach OECD living standards. With its health reforms over the past two decades, its growing technological prowess, and its application of innovative business models, China has made significant progress towards supporting higher-quality and more convenient health care for its 1.4 billion people. However, it is yet to deal with a host of challenges.

In a new article, Healing One-Fifth of Humanity, published in fall quarter 2019 of the Milken Institute Review, APARC Deputy Director and Asia Health Policy Program Director Karen Eggleston offers a progress report on China’s efforts to provide decent health care to all of its citizens, detailing how the reforms are working and what is left to do.

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A Tale of Two Chinas

One complex challenge China faces is addressing the gap in living standards between its rising middle class and its poorest citizens. Eggleston’s research shows stark gaps between urban and rural China in multiple measures, including life expectancy (almost 10 years differences as of 2013), infant mortality, and under-age-5 mortality. Health outcomes differ along other dimensions, too — between urban regions with higher and lower per capita income and among individuals with more or fewer years of schooling.

There are also striking inequalities in the burden of chronic disease and in health care and risk protection. For example, diabetes is associated with greater excess mortality in rural China, although prevalence is higher in urban areas. Moreover, although China has attained universal health coverage and put in place policies to enhance access while decreasing households’ out-of-pocket spending burden, the coverage of rural insurance is less generous than coverage for urbanites. Therefore, the prospect of catastrophic medical spending on delayed care remains substantially higher for rural than urban residents.

Additional challenges abound in multiple other areas, from addressing patient-provider tensions and trust, to changing provider incentives to promote value rather than volume, to deciding which new medical therapies qualify as basic. In broad terms, argues Eggleston, “China must build an infrastructure that increases the efficiency of health care delivery as it expands quality and usage.”

An important issue is the extent to which leveling public policy will ameliorate disparities, even as an array of social and economic forces push to widen disparities in health, health care use and burden of medical spending over a lifetime. The good news, says Eggleston, is that the process of catching up on one critical component of social justice, that is, universal health care, has begun, and there is evidence suggesting “that health investments can narrow the gaps in outcomes by compensating for health disadvantages.” There is also good reason to believe that policies that go beyond direct medical intervention – notably, investments in the quantity and quality of schooling – can have even greater influence on health and survival than access to medical care.

“The challenge now,” concludes Eggleston, “is to persist in an endeavor that requires flexibility, sensitivity to competing interests — and lots and lots of money.”

As the People’s Republic of China marks the 70th anniversary of its founding while Hong Kong prodemocracy protests intensify, Andrew Walder, the Denise O'Leary and Kent Thiry Professor and senior fellow at the Freeman Spogli Institute for International Studies, reflects on some of the changes in Chinese society and domestic policy, discusses his new book that offers a new interpretation of the Cultural Revolution, and shares details about his current research project.

Q: China is celebrating the 70th anniversary of the Chinese Communist Party’s rule, and of course the strategic shifts in Chinese foreign policy throughout the years are much more visible than the shifts in domestic policy. What have been some of the changes in that regard under Xi Jinping’s leadership?

Since Xi Jinping took office as president of the People’s Republic of China in 2013 he has changed the tone of the leadership, refocusing it on its survival. Now this is a regime that has seen nearly 30 years of 9 or 10 percent economic growth, has raised 400 million people out of poverty, and has generated significant upward mobility for very large swaths of the population, especially urban populations that have enjoyed a level of prosperity never experienced before. Yet Xi Jinping and the top Communist Party leadership seem to be driven by a strong concern for their survival.

So Xi has done three things. First, he has recentralized decision-making power and made himself a very powerful executive. Second, he has been cracking down ideologically on all talk about political reform – cracking down on universities, the media, human rights lawyers. That's actually led to significant alienation among educated populations. Third, he has launched a draconian anti-corruption campaign, arresting and imprisoning many people, including very high-ranking individuals.

Corruption in China isn’t as obvious as in a country like Russia and we, as foreigners, don't see it. But it’s likely that there are justified worries about the impact of corruption and the generation of wealth among the families of high-level officials, which seriously undermine the coherence and discipline of the Communist Party.

One interpretation of Xi’s actions is that he sees a lot of decay and observes the risks posed by the Chinese society’s openness to the outside world. He realizes that among the second generation – in his own family, in the families of other Party leaders, and among the best and brightest of China’s young, educated people – the Party really has no standing in terms of ideology. And he knows that most of the economic activity in China is generated in the private sector by people who are neither Party members nor under the subordination of the Party.

Xi’s actions could therefore be explained as a combination of conservatism and nationalism. But it could also be the case that Xi is perceptive and honest, observing cracks in the system that aren't yet visible to outsiders.

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Q: What is your assessment of China’s economic policy choices? How can China sustain robust economic growth over the coming years?

I believe Xi’s ultimate worry is about China’s economic growth. He recognizes that China is a variant of the East Asian “miracle economies” – South Korea, Taiwan, Japan – that all experienced much lower rates of economic growth after their huge takeoff periods. China has reached a certain level of GDP per capita, but to continue to raise that and truly be competitive with the other advanced economies they need to do things differently, including becoming more efficient in the use of capital and addressing their heavy debt burden.

I see China’s leadership as stuck in a dilemma similar to that of the Soviet Union in the 1970s. That is, they've had a model that worked well – China is now the world's second largest economy, a superpower – but there’s no agreement on how to continue from here. One school of thought resists change, while a more progressive school recognizes that this model isn’t going to work forever and that it’s necessary to be more efficient and creative – downsize the state-owned enterprise sector, give private enterprises a more level playing field, etc. The argument against such progressive economic liberalization, however, is that it will cause the Party to lose control over the leading sectors of the economy. So far, Xi appears to represent this view.

Q: Last year, Xi enshrined his ideology, “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,” in China’s constitution. Can this system promote the supremacy of the Communist Party to today’s Chinese, who are fundamentally different from the workers who were the soul of the Communist Revolution?

No. It's very hard to get the toothpaste back in the tube, if you will. I spend a lot of time in China, teaching and giving talks in Beijing and elsewhere, and I can say that Chinese students are far more savvy and critical than we might think, asking tough questions about issues such as state ownership of assets, the banking system, the rule of law. Obviously they react negatively when they hear foreigners criticizing their country and preaching to them about China’s lack of democracy or human rights abuses. I think Americans might similarly react to criticisms about our homelessness crisis or the Southern border crisis, though we know these are real problems.

Many young Chinese are much more critical of the leadership than portrayed by Western news media. This is a dynamic situation, and Xi seems to be trying to ward off something that he sees as real danger. Whether he's right or whether he's simply holding back progress in China I couldn’t say. However, as I do always tell people in China, Xi is certainly creating the conditions for strong support of the next leader who might want to take China to a more liberal direction.

Q: China is celebrating 70 years of Chinese Communist Party rule amid uncertainty that is testing its authority like never before. In particular, the relentless prodemocracy demonstrations in Hong Kong appear to have caught the Xi administration off guard. What are China’s options in dealing with the unrest in Hong Kong?

It’s hard to assess the situation in Hong Kong. I understand why it’s happening – over the last five or six years, most of the people I know in Hong Kong (students, academics, professionals) have been very worried about the erosion of rights and independence. But I'm surprised at how widespread the dissatisfaction is, how militant the protesters are, how there's no real connection between them and the elite Legislative Council prodemocracy camp, and how the unrest is not dissipating. The disagreement between China and the United States about what's happening and China’s accusations that the US is behind it all are very worrisome.

The Chinese leadership practically ruled out most of the effective response options. They clearly don't want to be seen as giving in and are worried about contagion to other cities in mainland China. But China’s political system isn’t good at responding to popular mobilized dissent and the leadership doesn’t truly understand free societies. They don't understand the concerns of people in Taiwan or Hong Kong, who have a way of life and freedoms that will be taken away by integration with the mainland under its current political system. Beijing cannot get away with applying in Hong Kong the type of intimidation and bullying it applies to its own society. I don't think the current leadership is imaginative or flexible enough to think creatively about how to get out of this situation.

Q: As the Chinse Community Party trumpets China’s stunning economic and military success, it aims to keep its history of catastrophic, often cruel policies and tragic events from its people. You have long studied the Cultural Revolution, a period rife in persecution, violence, and death, and have a new book about that, coming out next week. Tell us about it.

The book, Agents of Disorder: Inside China’s Cultural Revolution (Harvard University Press), charts the violence in China from 1966 to 1969. By May 1966, just seventeen years after its founding, the People’s Republic of China had become one of the most powerfully centralized states in modern history. But that summer everything changed. Mao Zedong called for students to attack intellectuals and officials who allegedly lacked commitment to revolutionary principles, and rebels responded by toppling local governments across the country. The book, which is the outcome of a long research project, Political Movements in an Authoritarian Hierarchy, aims to answer the question: Why did the Chinese party state collapse so quickly after the onset of the Cultural Revolution?

My answer to this question is based on analysis of a data set collated from over 2,000 local annals chronicling some 34,000 revolutionary episodes across China from 1966 to 1971. That research unveils two major findings.

The first is a new interpretation of what happened during that period. Standard accounts depict a revolution instigated from the top down and escalated from the bottom up through power seizures by rebel groups. But if you read the local histories and look at the scope of rebel activity and protest in the last half of 1966 through the beginning of 1967, it turns out there really wasn’t that much going on outside of a few major cities. Yet within that short period counties all over China had their governments overthrown. What happened was that low-ranking government officials overthrew their superiors, setting off a chain reaction of violence. Then army units sent to quell the disorders gave arms to those rebels that they supported, ushering in nearly two years of conflict that in various places came close to civil war.

The second finding is what I believe to be a fairly accurate estimate of the casualties during this entire period: how many people died, when, and how. My estimate is that 1.6 million people died, mostly when they tried to rebuild the government. Only a small percentage was killed by student Red Guards, which is what everyone thinks of in relation to the Cultural Revolution. In fact, every organization eventually had a campaign looking for class enemies and, ultimately, the repression that ended the disorder was worse than the violence it was meant to contain.

The other thing I do in the book is compare this period in China’s history to other infamous periods of state violence – Bosnia in the 1990s, the Soviet Great Terror of the late 1930s, the Indonesian massacres of suspected leftists in 1965, El Salvador's civil war, the Pol Pot regime in Cambodia, and Rwanda in 1994. I show that, in terms of total numbers of casualties, the Cultural Revolution comes second on the list, topped by Cambodia, which has almost the same number of killings. However, if you consider the rate of killing as a percentage of the population, then the Cultural Revolution ranks at the bottom of all the comparison cases and the worst case by far is Cambodia. If the intensity of the violence in China had been the same as in Cambodia then 150 million people would have been killed.

Beyond the story of the violence and bloodshed in the Cultural Revolution, there’s a big story here about how many people were persecuted yet survived. The Cultural Revolution put many, many people through hell, but many survived and regained positions of authority and power, leading the country in the 1980s, which is why they wrote about what happened in their localities.

Q: Could you share some details about your current research project?

My current project, Political Violence and State Repression, analyzes unusually detailed internal investigation reports compiled by the government of a Chinese province that experienced some of the most severe level of violence and highest death tolls during the Cultural Revolution. There were 90,000 casualties in that province that had a population of about 24 million – a death rate much higher than the average we talked about before. The question is why this happened in that particular province.

The available investigation reports contain close to 5,000 political events and associated casualties, for all 86 cities and counties in the province. For the last three years I've been working with research assistants to code this massive body of information into a data set, which is now almost ready for analysis. The quality, level of detail, and comprehensive coverage of the materials makes it possible to analyze state collapse and political violence with an unusual degree of precision and depth.

After studying early childhood development in China for several years, Alexis Medina, assistant director of Stanford's Rural Education Action Program (REAP), and her colleagues were asked a question that opened up a whole new line of inquiry. 

Read the full Q&A with Jennifer Huber and Alexis Medina.