Sir, Jim O'Neill writes that China's health service plans announced this month may perhaps ultimately be the most important development in the world economy because of the way in which it will encourage consumption and reduce savings (“China shows the world how to get through a crisis”, Insight, April 23). With all respect to the man who coined the Bric acronym, that rather depends on the timescale you have in mind.
The plan for 2009-2011 needs to be seen for what it is: a strictly limited response to a serious issue that the leadership is seeking to finesse. In its first three-year stage, it is concerned mainly with building clinics in villages. This is a necessary step but one that is hardly likely to reduce precautionary savings by rural residents who will still have to pay for medical services. As things stand, its fruition will not come until 2020, by which time anything may have happened to the economies of both China and the world.
The amounts budgeted for health insurance will be for only part of the cost of care, and will cover only basic services. To qualify for insurance, people have to spend a set amount themselves, which has been fixed at a level that will exclude many, particularly in rural areas. Insurance will be available only at designated clinics, limiting its national reach and opening the way to manipulation, particularly given the discretionary involvement of local governments.
