Say It Ain't So Already

China Powers Ahead

March 9, 2010 at 3:45 PM Leave a comment

There can be real advantages to being a wealthy Communist country, like deciding to establish a national health care system and getting it done almost overnight, such as in China:

HONG KONG — Wang Huijuan and her husband braved an overnight train ride to Beijing from Anhui Province to see a doctor about her ailing intestines. The clinic back home could only take her temperature and blood pressure.

“They don’t have the equipment or expertise to treat more serious illnesses,” said Wang, 47, who shivered in the cold as she waited in vain last week to see a physician at Beijing Xiehe Hospital. “We’ll come back at 4 a.m. tomorrow.”

The $1,460 in life savings the couple brought to pay their costs may become an expense of the past after the Chinese government spends $125 billion to start a national health-insurance system. The benefits will be felt beyond the sick as General Electric and Philips Electronics compete to sell imaging equipment and household savings are freed up to buy clothes and cars.

More than 300 million Chinese are without health insurance, the World Bank says, and the remaining 1 billion have only partial coverage. In part to pay for those costs, Chinese save about one-quarter of their income each year and have accumulated as much as $5 trillion, said Stephen Green, chief China economist for Standard Chartered Bank in Shanghai.

Unlocking those savings is key to China’s plan to shift its economic drivers from exports and investment to domestic consumption after the global crisis and a 16 percent export decline in 2009 laid bare the country’s vulnerability to swings in external demand.

So, most Chinese don’t have health insurance and they save too much money, according to the government, in case they need treatment.  In order to discourage saving for medical expenses, the government is going to establish a national health care system so people will instead spend their money on things like clothes and cars.  They want their citizens to buy Chinese products so their economy is self-sustaining, instead of being an export-based economy.

Pretty smart.  We could learn a thing or two here.

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