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.”

On October 1st, with a massive National Day parade down Chang’an Avenue in Beijing, the People’s Republic of China celebrated the 70th anniversary of its establishment in 1949. Like a split-screen T.V., however, on the other side of the border in Hong Kong, black-clad protesters wearing gas masks and goggles undertook one of the most violent protests in Hong Kong SAR since the 1997 handover.

With those contrasting images still fresh on everyone’s minds, FSI, Shorenstein APARC, Stanford China Program, and the Center for East Asian Studies jointly sponsored a conference on October 2nd titled “Hong Kong: A City in Turmoil” to an overflow audience. Jean Oi, Director of the Stanford China Program who moderated the program opened the conference by quoting Stanford President Marc Tessier-Lavigne and Provost Persis Drell who, in a campus-wide message, had recently encouraged the university community to not shy away from difficult conversations. “We have an extraordinary opportunity [at Stanford],” she quoted from their email, “to learn from each other, to have our thinking challenged, to sharpen our arguments and to develop better ideas from a thoughtful debate.” Even while explicitly aware, therefore, that differing opinions rage on both sides of the debate regarding Hong Kong’s protests, but trusting that “there are thoughtful people on both sides of the debate,” she continued, “we have decided to organize this special event.”

The former Chief Secretary for Administration of the Hong Kong Government (1993-2001) Anson Chan gave the keynote speech followed by a panel discussion featuring Harry Harding, University Professor and Professor of Public Policy, University of Virginia; David M. Lampton, Oksenberg-Rohlen Fellow, FSI, Stanford University; and Ming Sing, Associate Professor, The Hong Kong University of Science and Technology.

The Honorable Anson Chan speaks at Hong Kong: A City in Turmoil conference.

The Honorable Anson Chan gives the keynote speech at the "Hong Kong: A City in Turmoil" conference.

Keynote Speech

In her keynote, Anson Chan first recalled the handover ceremony in 1997, which she attended as Hong Kong SAR’s Chief Secretary, bridging the transition from British sovereignty to Chinese sovereignty. Chan spoke of her dawning realization at the time that the transition of sovereignty “would call Hong Kong people to forge a new identity” that “reconciled our community both with its past and future.” She noted “that many Hong Kong people, particularly the young, have indeed forged a new identity, but not as loyal, submissive Chinese patriots that Beijing had hoped for.” The central government had “singularly failed to win hearts and minds,” Chan added, especially of its young people. Hong Kong is, indeed, now at a crossroads and, she admitted, is a “city in turmoil.”

In Chan’s recollection, the central government exercised its power with “great restraint” following the handover. At first, the SAR government, too, was vigilant in protecting Hong Kong’s high degree of autonomy. Gradually, however, the city’s autonomy and civil liberties, she asserted, suffered increasing erosion. In particular, “[o]ver the past fifteen years, things changed drastically.” Describing the series of events that have caused Hong Kong’s residents increasing alarm -- including the forced abduction of Hong Kong-based booksellers; disappearance of a mainland Chinese billionaire from a luxury hotel in Hong Kong; Legislative Council members’ oath-taking controversy; the resulting disqualification of six legislative members; and the political screening of pro-democracy electoral candidates, etc. -- she further noted that the “snail’s pace of progress” in implementing full universal suffrage for the election of the Chief Executive and all members of the legislature promised in the Basic Law also brought on mounting popular frustration and despair.

“Was this progressive erosion of Hong Kong’s autonomy inevitable?” Chan asked. “I don’t think so,” she answered. Since 1997, Hong Kong SAR’s successive Chief Executives, she countered, have progressively failed to reassure the Hong Kong people that, first and foremost, they will do their utmost to uphold “one country, two systems,” and to defend Hong Kong’s autonomy. In an unsparing critique, she noted, they have instead increasingly come across as “mouthpieces of the central government, toeing the Beijing line.” Chan also suggested that “some years back, Beijing began to both lose confidence in the judgment and competence of the Hong Kong administration and to fear that growing sense of people’s identity as ‘Hong Kongers’ rather than Chinese citizens could pose a threat to the long-term, successful integration of Hong Kong into the motherland.” This growing distrust, then, proved catalytic to increasing tensions and difficulties in Hong Kong-PRC relations.

Characterizing 2003 as the first watershed moment when large public demonstrations – Hong Kong people’s “first taste of people power” -- forced the SAR government to withdraw its proposed bill under Hong Kong Basic Law Article 23, Chan recounted the failure of the constitutional reform consultation process in 2013-2014, the decision of the Standing Committee of the National People’s Congress on August 31, 2014 to set institutional limits on universal suffrage, and the resulting 2014 Occupy Movement, which later morphed into the Umbrella Movement. These popular movements failed to yield genuine universal suffrage, however, and this failure, Chan stated, “left wounds that went unhealed and festered quietly.”

The million-strong protests on June 9th and 16th to register popular opposition to Hong Kong SAR government’s introduction of its extradition bill “broke all records,” Chan noted. Recounting the five demands of the current protesters, Chan voiced support for the establishment of an independent commission with “carefully crafted terms of reference” that could objectively examine the handling of the current unrests. Such a commission could go a long way towards pacifying the protesters, she suggested, and “[s]top the violence, at least for the time being.” She also urged the reopening of broad-based consultation on political reforms, lain dormant since the collapse of the Umbrella Movement in 2014; and to even consider a measure of amnesty to exonerate a subset of both the protesters and the police. Recognizing how problematic such a recommendation might be in the face of spiraling violence and vandalism, she noted, “we are in an unprecedented crisis, and for society to heal, unprecedented measures such as an amnesty applying to certain actions by the protesters and the police force may well prove to be necessary.”

Calling herself an “unrepentant optimist” even against formidable odds, Chan highlighted how Hong Kong has come through many challenges before and after the handover. She sought to emphasize how “[t]he majority [of Hong Kong people] are not anti-China and accepts that Hong Kong is a part of China.” However, she continued, “they are also proud of their Hong Kong identity and fiercely protective of the rights and freedoms they enjoy and which are guaranteed by the Joint Declaration and the Basic Law.” Condemning the violence committed by both the police and the protesters, Chan ended her speech with the following words.

So, on this seventieth anniversary of the founding of the People’s Republic of China, we in Hong Kong recognize the huge progress that our country has made in a breathtakingly short time, lifting hundreds of millions out of poverty, improving living standards and achieving economic growth and social advancement that are the envy of the world. We are proud of the unique contribution that Hong Kong has made to our nation’s spectacular achievements and modernization. But we are distressed that the central government feels it necessary to be increasingly repressive towards its Hong Kong subjects. I urge the Beijing leadership to act with greater confidence and to trust us more completely with stewardship of our own future by allowing us to elect our own leaders. In these troubled times, we ask Beijing respectfully to listen with greater understanding to the voices of Hong Kong’s upcoming generations, to recognize and respond to their fears and aspirations and, above all, to harness their talent, their energy and commitment for the benefit of the city we all love and for the benefit of our nation as a whole.

Panel Commentary

Harry Harding, University Professor and Professor of Public Policy, University of Virginia, next spoke from the panel. He applauded the clear and concise rendering that Chan provided of how Hong Kong arrived at the current crisis but noted that his was “a more pessimistic forecast” of Hong Kong’s future. With “one country, two systems” due to expire in 2047, he surmised that Beijing will further whittle away at Hong Kong’s key institutions, such as the judiciary, the press, and universities, and, perhaps, even the freedom of expression of its business community. With respect to Taiwan, Harding noted the increasing urgency in President Xi Jinping’s call for Taiwan to be reunified with the motherland. Yet, Harding noted, the developments in Hong Kong have made “one country, two systems” increasingly unpalatable to even those traditionally favorably disposed towards Beijing. For the U.S., the recent protests have enabled Hong Kong to take center stage with legislative action around the Hong Kong Human Rights and Democracy Act, the PROTECT Hong Kong Act, and debates surrounding the Hong Kong Policy Act. The recent unrest has also contributed to declining favorability ratings for the PRC from all sectors of the United States, he noted.

Harry Harding, one of the panelists at the conference, gives his thoughts on the situation in Hong Kong.

Harry Harding, one of the panelists for the conference, gives his thoughts on the situation in Hong Kong.

Ming Sing, Associate Professor, The Hong Kong University of Science and Technology, first delineated the increasing levers of political and economic controls imposed by the PRC government upon Hong Kong SAR since 2003; and the corresponding rise in intensity of political protests in Hong Kong. He then provided a fine-grained analysis of the different phases of the 2019 protests, which began as a peaceful mobilization of public resistance, then grew in violence and counter-violence. He further presented a number of surveys that showed how the majority of the protesters are, indeed, well-educated and young with many of the frontline protesters being university and secondary students. Despite media reports that have suggested that economic discontent lies at the heart of protesters’ grievances, Sing presented survey data that the demonstrators’ grievances are, in fact, mainly political, including Hong Kong’s lack of universal suffrage and central government intervention, among others. Such data, he concluded, further highlights the gaping distrust between Hong Kong’s youth and the central government. 

Ming Sing speaks during the Hong Kong: A City in Turmoil conference.

Ming Sing explains the information presented in his slides.  

David M. Lampton Oksenberg-Rohlen Fellow, FSI, Stanford University, characterized himself as “hopeful but worried” about the situation in Hong Kong. Raising five observations in particular, Lampton noted the first worrying sign: i.e., neither the outside world nor the SAR have a “road map to the future” with the PRC. Neither the Basic Law nor the Joint Declaration of 1984 can now serve as such a “roadmap,” Lampton asserted, and without a “shared vision,” he stated, “[i]t’s hard to be optimistic.” Secondly, in this “leaderless” protest movement, Lampton asked whether anyone can authoritatively negotiate with and enforce upon its followers any agreement reached with Beijing, should any transpire, so that it can lead to an effective resolution. Thirdly, as evidenced by the PRC’s mass display of “muscular nationalism” on October 1^st, Lampton questioned whether Xi Jinping has any incentives to accommodate Hong Kong protesters’ demands, especially when Beijing’s leadership may have its own worries about domestic stability in the PRC. Fourth, with constitutional crises engulfing both the U.S. and Great Britain, Lampton noted, Western democracies are also hampered from effectively and responsibly addressing the situation in Hong Kong. And lastly, Lampton acknowledged how, in the policy vacuum left by the Trump White House with respect to Hong Kong, U.S. Congress was speeding towards adopting punitive legislation against the PRC. But Lampton again expressed doubts as to whether sanctions and threats are effective tools to extract concessions from the PRC government under Xi Jinping.

David M. Lampton shares his viewpoint with the other panelists.

David M. Lampton shares his viewpoint with the other panelists.

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The Honorable Anson Chan gives summarizing remarks to close out the "Hong Kong: A City in Turmoil" conference.

Watch the entire conference below. You can also listen to the audio version below, selecting individual tracks.

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.