China’s nearing the next tipping point on marketization: this time, in medical care
Thomas Barnett
“Chinese Doctors Tell Patients To Pay Upfront, or No Treatment: Parents of Boy With Leukemia Scramble for Cash to Cover New Chemotherapy Round; Threat Seen to Social Security.,” by Andrew Browne, Wall Street Journal, 5 December 2005, p. A1.
As recently as the late 1970s, before Deng started to marketize the economy, there was universal healthcare in China.
Now, about one-third enjoy health insurance, and the rest must pay as they go.
This cannot go on in a country experiencing the huge economic trajectory that China is experiencing now. It’s just too inefficient, as their own economic think tanks are beginning to note. And it’s just too politically dangerous, as the 4th generation of leaders under Hu and Wen are beginning to admit.
You just end up with too many heart-rendering stories. It’s just too damaging to worker productivity.
So the next stage of China’s marketization must come: privatizing insurance more and more. It’s begun in life insurance and is moving quite rapidly there. Ditto for car insurance. It needs to begin in health insurance.
And therein lies the rub for the authoritarian government: each time it must work to avoid political unrest, the answer seems to be “more marketization,” which in turn only decreases centralized control over the economy and thus the society, and thus fuels more bottom-up calls for pluralism to reflect the political realities of all that change.
Timing and sequencing are, of course, everything in this game, but the looming crisis in inescapable.
Thus China will be forced to open up even further to attract the wherewithal from abroad to transform their outdated medical system of payments. And, in doing, so watch their government come under the same strains that our own faces on guns v. butter.
Every dollar counts in shrinking the Gap
“Emerging-market indicators: Remittances,” The Economist, 26 November 2005, p. 116.
Great data point from The Economist: Remittances from ex-pat workers back to emerging markets and developing countries totals $167 billion this year. This is the equal of foreign direct investment in these countries (basically Gap + New Core, in their categorization scheme) and twice the value of Official Developmental Aid from the Old Core, or West.
Moreover, it’s estimated that maybe this number is low, with 50% more coming in money flowing through informal channels not tracked.
The leaders? India and China and Mexico and Philippines (three New Core and the Seam State with the highest percentage of its labor working abroad)d
Fascinating stuff that shows that individuals matter a lot in shrinking the Gap. |
