China's healthcare and education: a reality check

To judge by most Western analysts, China is on a fast-track to the top in global technology. Its tech trade is rising; patenting is up; and R&D spending is rising so fast that the EU Commission recently warned that, measuring research spending as a percentage of GDP, China may overtake Europe by 2010. (Of course, that may say more about Europe than it does about China.)

 

So it's refreshing to see a reminder that China is still very much a country in development. A new report from the Paris-based Organisation for Economic Cooperation and Development finds that China doesn't spend enough on education or healthcare, and needs to reform the way it runs both sectors. "Official spending in these areas, along with culture and science, amounted to the equivalent of 5.5% of GDP in 2002 compared with an average of 28.2% for OECD countries," says the report, Challenges for China’s Public Spending: Towards Greater Effectiveness and Equity.

The report goes on to criticize the centralized Chinese system for not giving local administrators enough resources and autonomy - forcing some local authorities to resort to "unofficial levies and charges.  The recourse to debt by local government is also widespread despite the fact that under Chinese law it is illegal for these authorities to borrow or issue bonds."

 

And a kicker: "Nearly 50% of the urban population and 80% of the rural inhabitants lack medical insurance."