Health and public finance

Sabrina Ching Yuen Luk

Chapter 13 in Handbook of Public Finance in China, 2026, pp 295-317 from Edward Elgar Publishing

Abstract: This chapter examines how the Chinese government finances healthcare in the pre-reform and reform eras and the associated challenges. The government in the pre-reform era used state general revenues to finance healthcare for government employees while subsidising healthcare for the rural population. It required individual enterprises to finance healthcare for their employees. The government in the reform era from 1998 onwards has established a multi-layered public health insurance system. It adopts a social health insurance model to finance healthcare for urban employees while annually subsidising voluntary public health insurance schemes for rural households and urban residents. During the outbreak of the 2019 coronavirus disease (COVID-19) pandemic, the adoption of a ‘dynamic zero-COVID’ strategy led to a massive amount of fiscal funds being spent on pandemic prevention and control. Local governments are running short of cash after three years of zero-COVID policy, which was finally eased in December 2022.

Keywords: Social health insurance system; Urban Employee Basic Medical Insurance; Urban Resident Basic Medical Insurance; New Rural Cooperative Medical System; Dynamic zero-COVID; Strategy; Challenges (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035311705
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