CHINA HUMAN DEVELOPMENT REPORT 2007/08 Access for all: Basic public services for 1.3 billion people The preparation of this report was commissioned by UNDP China and coordinated by the China Institute for Reform and Development China Publishing Group Corporation China Translation & Publishing Corporation CIP Data &KLQD+XPDQ'HYHORSPHQW5HSRUW%DVLF3XEOLF6HUYLFHV%HQH¿WLQJ%LOOLRQ&KLQHVH 3HRSOH(QJOLVK &RPSLOHGE\8QLWHG1DWLRQV'HYHORSPHQW3URJUDP±%HLMLQJ&KLQD7UDQVODWLRQDQG3XEOLVKLQJ &RUSRUDWLRQ1RYHPEHU,6%1 ,&KLQD«,,8QLWHG«,,,6RFLDOGHYHORSPHQW±5HVHDUFKUHSRUW±&KLQD²a²(QJOLVK 6RFLDOVHUYLFH²5HVHDUFKUHSRUW²&KLQD²a²(QJOLVK,9' $UFKLYDO/LEUDU\RI&KLQHVH3XEOLFDWLRQV&,3'DWD+= 1R All rights reserved. Any part of this publication may be quoted, copied, or translated by indicating the source. No part of this publication may be stored for commercial purposes without prior written permission. 7KHSXEOLFDWLRQRQO\UHÀHFWVWKHRSLQLRQVRIWKHZULWHUVEXWQRWQHFHVVDULO\WKH8QLWHG 1DWLRQVRU8QLWHG1DWLRQV'HYHORSPHQW3URJUDPPH7KHIRUPDQGFRQWHQWRIDQ\PDS LQFOXGHGLQWKHSXEOLFDWLRQGRHVQRWUHSUHVHQWRULQGLFDWHWKHOHJDOVWDWXVDQGULJKWRI81 6HFUHWDULDWRU81'3WRDQ\FRXQWU\UHJLRQFLW\RUDUHDRUWKHSRVLWLRQDQGYLHZSRLQWWR the territory and boundary. 3XEOLVKHGE\&KLQD7UDQVODWLRQDQG3XEOLVKLQJ&RUSRUDWLRQ $GGUHVV)ORRU:XKXD%XLOGLQJ $ &KHJRQJ]KXDQJ6WUHHW ;LFKHQJ'LVWULFW%HLMLQJ&KLQD 7HO Email: [email protected] :HEVLWHhttp://www.ctpc.com.cn &RYHU'HVLJQ6SHQFH//& /D\RXW'HVLJQ6SHQFH//& Distributor: Xinhua Bookstore )RUPDWîPP (GLWLRQ1RYHPEHU¿UVWHGLWLRQ 3ULQWLQJ1RYHPEHU¿UVWSULQWLQJ ,6%13ULFH50% $OOULJKWUHVHUYHG &KLQD7UDQVODWLRQDQG3XEOLVKLQJ&RUSRUDWLRQ PREFACE s a result of 30 years of reform and opening up, China has made remarkable progress Ain human development, successfully having solved the problem of providing adequate food and clothing to its 1.3 billion people, and achieving a miracle in the history of pov- erty reduction in the world. On the whole, China is moving from a subsistence to a developmen- tal society. Observing China’s reform and development from this new historical vantage point, we can see clearly that changes have been taking place in the obstacles and contradictions confronted in China’s economic and social development. Compared with the beginning years of the reform era, the pressure to provide necessities for subsistence is diminishing, while that to provide all- round human development is growing. In the past 30 years, China has successfully solved the problem of the inadequate supply of necessities. The current comprehensive and rapid growth in needs for basic public services, however, coupled with inadequate supply have gradually be- come more serious challenges for this phase of human development. The Chinese Government now has several important tasks: to establish sound public service systems and institutions, to improve its capacities to provide services, and to guarantee provision for the whole population in order to further promote human development. Human development, which essentially means all-round development for every member of Chinese society, is at the core of the scientific development concept advocated by the Govern- ment. To practice the scientific developmentconcept requires guaranteed provision of basic public services such as compulsory education, public health and basic medical care, public em- ployment services and basic social security schemes, so as to translate the fruits of economic development into all-round human development. An important objective of China’s human development in its new stage is equitable develop- ment. Equalization of basic public services is a significant government policy decision to main- tain social equity and justice, and to build a harmonious society. With sustained economic and social development, China will continuously improve related policies and institutional environ- ments, and promote the equalization of basic public services as a core instrument for reducing disparities between urban and rural areas, across regions, and between the rich and the poor, and for enabling all members of society to benefit from the fruits of reform and development. This report, Basic Public Services for 1.3 Billion People, probes the basic trajectory of China’s human development for the past 30 years; provides an overview of the history of basic public service de- livery, along with current challenges; and puts forward a series of forward-looking and operational policy recommendations to improve the basic public service delivery system. All of this can facili- tate innovations in related policies, systems, institutions and mechanisms required by China’s ef- forts to build, in an all-round way, a well-off society embracing social equity, justice and harmony. i This report is the fifth China Human Development Report written by the China Institute for Reform and Development (CIRD), and the second one by a Chinese institution in collaboration with UNDP. Known for its independence, objectivity and impartiality, CIRD has prepared the report from the perspective of economic transition and social transformation, and taken full ad- vantage of its role as a small organization with a large network to make the preparation a highly participatory process. It is our hope that these efforts will prove to be fruitful. Gao Shangquan Chairman Chinese Research Society for Economic System Reform 25 July 2008 ii FOREWORD hirty years of reform and opening up have transformed China through an unprecedented Tsurge in economic development that has lifted hundreds of millions of Chinese people out of poverty, and raised the country from a low-income to a middle-income nation. The speed, scope and magnitude of the improvements in the lives of 1.3 billion people rank among the most stunning achievements in the history of human development. At the same time, so dramatic a transformation has inevitably led to new stresses. Rapid eco- nomic growth in such a populous country has severely strained air and water quality, and placed acute pressures on China’s limited land resources. The sustainability of development will re- quire a timely and effective response to these and other environmental challenges. Inequalities that have emerged during rapid growth have widened to levels that pose additional obstacles. China’s economic reforms have been centered around a concerted shift towards market-based mechanisms to encourage and reward successful individuals, enterprises and geographical re- gions, allowing them to benefit fully from their abilities and other advantages. Some increase in inequality was explicitly recognized as inevitable and even necessary. This represented a major change in approach from the more egalitarian orientation of the previous decades. The explo- sive surge in productivity as a response to this shift in incentives has been one key force that has powered China’s rapid economic development. A side effect, however, has been that individu- als and regions with less favourable starting conditions have tended to fall further and further behind the others. The 2005 China Human Development Report, Development With Equity, presented a detailed analysis of these development gaps, between urban and rural areas, coastal and interior re- gions, genders and population groups. The 2007/08 China National Human Development Re- port, Basic Public Services for 1.3 Billion People, builds on the 2005 report by digging deeper into underlying causes of domestic development gaps. It focuses on the delivery of four essential basic public services—primary and junior secondary education, basic health care, social insur- ance and employment services—and analyses the important national goal of “equalization” of access to these, closely linked to the equity goal that was presented in the 2005 report. Direct causal linkages between gaps in public service provision and the quality of life in China are examined, such as the correlation between access to good health care and life expectancy in different parts of the country. In looking at these issues, the report touches on some of the most critical policy questions that China faces in its shift from a planned state-dominated economy with an egalitarian social ideology, to a market-based economy and service-oriented state. China’s move away from egalitarianism has generated a debate about the appropriate defini- tion and role of the concepts of equity and social justice in the new socialist market economy. One important outcome of this discussion is a new emphasis on equality of opportunity. That is to say, each woman and man should have a fair chance of succeeding in the new economy— iii people should not face large obstacles or enjoy excessive advantages from the start due to the conditions of their upbringing, place of birth, ethnicity, political connections, and so on. Al- though the previous egalitarian emphasis on equality of outcomes—roughly equal income and standard of living for all people—is no longer seen as conducive to a sound society, equality of opportunity is essential if China is to make full and efficient use of its enormous pool of human resources. Inequality of opportunity prevents or discourages people from fully unleashing their abilities, and thus hinders the efficient development of a nation. The equitable provision of basic public services is one essential means by which governments ensure equality of opportunity for their citizens. Good health, a solid education, freedom from vulnerability to poverty in old age or in the event of a work accident or medical problem, and access to training and other employment