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Collaborative Governance in China’s Health Sector: A Comparison with Education, Housing, and Long- Term Care

By Jack Donahue1, Karen Eggleston2, Yijia Jing,3 and Richard Zeckhauser1

1Harvard University 2Stanford University 3Fudan University

Abstract

This paper examines the role of the private sector in contemporary China’s health sector, compared to education, affordable housing, and long-term care policies for the elderly and the disabled. We first briefly summarize the economic theory of comparative advantages in public and private delivery and collaborative governance, defined as government sharing with the private sector a real measure of discretion as to the means and, to some extent, the ends of collective action. We then analyze data about the extent of private sector engagement in the health sector nationwide, compared to private school enrollment for compulsory education, and discuss cases ranging from commercial insurance companies’ participation in management of medical insurance to the role of private companies in biomedical innovation. We supplement the nationally representative data with results from our survey of the delivery and financing of 9 public services in 18 medium-size cities in early 2013. The survey includes information about contracting for delivery of emergency medical services; hospital and primary care; health insurance; long-term care and other support services for the elderly and disabled. These services are compared to education policy and minban schools; expansion and management of affordable housing; job training; park management; and public transportation. The survey results confirm what the national and provincial-level data suggested: although localities differ in the extent of

1 private sector hospitals and clinics, in all surveyed cities the public sector continued as the dominant insurer and provider; few cities systematically contracted with private providers; and no cities adopted an explicitly collaborative approach in the health sector. Within health insurance, medical services and public health, private engagement has been peripheral but seems poised to expand. China’s local authorities and central government will be increasingly challenged to understand and apply effective collaboration to reap the rewards associated with increased non-government roles in the health sector.

Introduction

In July 2012, China released plans for “equalization” of access to 8 different areas of public services: education; employment services; social insurance (pensions, maternity and unemployment insurance, etc.); social services; health care and public health; family planning; housing security; and cultural and sports activities and recreation. How does China deliver these services, and plan to do so in the future? What is the role of the private sector in contemporary

China’s health sector, compared to other sectors (e.g. education, long-term care, affordable housing)? How prevalent are government initiatives to engage non-government providers across

China’s medium-sized cities? What might explain the heterogeneity in approach across cities?

Are there examples of the government sharing discretion with private collaborators, what we term “collaborative governance”?

This paper starts to address these questions. The main empirical section of the paper draws from statistical summary information about the extent of private sector engagement in the health sector nationwide, compared to private school enrollment for compulsory education

(primary and secondary school). We discuss cases ranging from commercial insurance companies’ participation in management of medical insurance, to the role of private providers of primary care (widely discussed as an important component of the next phase of health reforms).

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We supplement these trends in each section with quotes and analysis of results from our survey of 9 public services in 18 medium-size cities in early 2013 (Figure 1). The survey includes information about contracting for delivery of emergency medical services; hospital and primary care; health insurance; long-term care and other support services for the elderly and disabled.

These services are compared to education policy and minban schools; expansion and management of affordable housing; job training; park management; and public transportation.

This paper focuses on the health sector and care for the elderly and disabled, compared to education and housing; for a description of results regarding park management, job training, and public transportation, as well as a comparison with those same services in a selection of US cities, please see our companion paper. Our analyses are predominantly descriptive and positive, as opposed to normative or prescriptive. Before the empirical discussion, we first introduce our conceptual framework in the next section.

Conceptual Framework

Collaborative Governance as Shared Discretion

Drawing on previous conceptual work and research in the United States, we use the term

“collaborative governance” to refer to innovative ways to create public value by drawing on the private sector with some shared discretion. Indeed, shared discretion is what distinguishes collaborative governance from straightforward contracting—where little or no discretion is granted. With a collaborative approach, the government shares with the private sector a real measure of discretion as to the means and, to some extent, the ends of collective action.

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In many countries and contexts, especially in developing countries, the primary motivation for collaboration is to harness additional resources from the private sector. While this may be an important reason to collaborate, there are also many other important rationales linked to improved outcomes, including the ability of private firms, NGOs and social organizations to enhance productivity, provide information, or even confer legitimacy (Donahue and Zeckhauser

2011). Our approach explicitly recognizes the dangers of collaborative governance.

Arrangements must be carefully crafted and performance effectively monitored. Otherwise, private players will exploit their discretion to warp collective undertakings in ways that cater to their narrow interests.

Collaborative Governance in China’s Development

China’s approach to the private sector reflects its position as a developing economy, one transitioning from a centrally planned economy to a strongly market-based economy. In the service sectors that we examine in this paper, our conceptual framework places at the forefront an examination of the constraints on the Chinese government’s institutional capacity that complicate efforts to share discretion and accountability and that limit China’s ability to “harvest the benefits and limit the risks associated with private discretion” (Donahue and Zeckhauser

2011, p. 197).

Several factors enhance China’s ability and willingness to embrace collaboration.

Perhaps foremost, collaborative governance—as distinct from related themes like social entrepreneurship or corporate social responsibility—preserves for government a privileged role in defining the public purposes to be pursued. This assumption resonates with Chinese history and with China’s top leadership. Moreover, China’s most urgent goals for the decades ahead feature the kinds of missions that invite collaboration with the private sector. China has

4 embarked on the challenging tasks of dismantling central planning and developing a market- based economy. The government now retains land ownership but allows private households full discretion in agricultural production, while pursuing an incremental approach to reducing the relative size of state-owned enterprises in the economy. The complex process of redrawing the boundaries between private enterprise and various levels of the government has involved privatization (termed “ownership restructuring”) and the transfer to local jurisdictions of many social services previously provided by state-owned enterprises, including hospitals and clinics, schools, and daycare centers. Simultaneously, legal changes allowed non-government provision of the same services, with the government sector continuing to play a dominant role in several cases. Before turning to how this process has unfolded in the health sector, it is worthwhile articulating how economic theory might guide governments in deciding which services are most amenable to the collaborative approach, the focus on the next section.

Comparative Advantage and Collaborative Governance in the Health Sector

Analysts and citizens alike may reasonably disagree on whether the collaborative realm should constitute a big or small share of what government does. However, our guiding conceptual framework assumes that we may well be able to agree on which functions are comparatively better and worse suited to the collaborative approach. In other words, we can come together to gauge a delivery model’s fitness for a particular task, not on an absolute basis, but in relative terms (Eggleston and Zeckhauser 2001; Donahue and Zeckhauser 2011).

Not all services are equally appropriate for private sector engagement in financing and/or delivery. Economic theory—including incomplete contracting and principal-agent theory in light

5 of public goods and externalities—provides insights about the strengths and weaknesses of collaborative governance for accomplishing specific public goals in the health sector.1

As a framework for discussing the comparative advantage of contracting out or collaborative governance for disparate public goals and services, we utilize the theory of comparative advantage developed in Zeckhauser and Eggleston (2001); here we briefly summarize the key results. Public (or sometimes private not-for-profit) providers have a comparative advantage for health services with some combination of the following characteristics: (a) hard to contract; (b) involve pure public goods or high externalities; (c) are not monitorable by patients, in the sense that patients can discern provider quality distortions; and (d) are highly susceptible to inefficient patient sorting. Examples might include public goods vital for health, such as clean air and water; population-based health initiatives and other services with large positive externalities (e.g. control of infectious disease); and services plagued by asymmetry of information and inability of the recipient to assess quality or exercise effective choice, such as blood banks, care for the severely mentally ill, and long-term care for elderly and disabled.

In contrast, private providers have a comparative advantage for services that combine one or more of the following features: (a) readily contractible; (b) quality monitorable by patients

(directly or through provider reputation); (c) susceptible to competition; (d) not amenable to dumping of unprofitable patients, or for which risk adjustment of payment is feasible and reasonably accurate; and (e) incentives for rapid quality innovation are more valuable than low- powered incentives for quality-damaging cost control. Examples include elective surgery and

1 The health sector, according to conventional definitions, includes the financing and delivery of personal health and medical services, as well as population health. A slightly broader scope would also include the linked production and distribution chains for all medical devices and inputs, as well as biopharmaceutical innovation and Traditional Chinese Medicine (TCM) research, as well as efforts to improve the broader social determinants of health.

6 most dental care, as well as the provision of drugs and many aspects of primary health care. A less clear middle ground covers services with redistributive concerns and economic spill-overs where selection and dumping of unprofitable patients could be addressed in part through public financing rather than direct delivery (e.g. universal coverage of basic medical insurance).

China’s Health Sector: Reforms and the Evolving Role of the State

The 2009 National Health Reforms: Expanded Government Financing, Continued Public

Delivery

China announced national healthcare reforms in spring 2009, continuing probably the largest expansion of health insurance--in terms of the number of beneficiaries, though emphatically not the level of per-person coverage—that the world has ever seen. Reforms have focused on healthcare financing, while keeping the delivery system basically in place. In China, the public-private mix had been tilted toward private financing (mainly patient out-of-pocket payments) and government delivery, until reforms with subsidization of insurance infused a large amount of government funds into the heath sector.

Private out-of-pocket spending had increased during the 1980s and 1990s to 60% of total health spending by 2001, making access to care difficult for the poor and those with credit constraints, as well as exacerbating regional and urban/rural disparities. In the first few years of the 21st century, however, the government announced public subsidies to basic voluntary health insurance in rural areas (the New Cooperative Medical Scheme), and in 1997 piloted and expanded a similar voluntary subsidized program for urban residents not covered by employee insurance. These government subsidies for social health insurance, alongside renewed

7 government investment directly in government providers, reversed the trend of increasing private out-of-pocket spending as a share of total spending. China’s public spending now constitutes a little over half of China’s total health spending, much higher than many low- and middle-income countries; similar to the US and South Korea; and significantly lower than average 72% among

OECD countries (Eggleston 2012).

China’s hospitals, and a large share of its grassroots providers, are government owned and managed.2 Table 1 shows that private hospitals accounted for a small (single-digit) share of discharges and of outpatient visits ever since that data has been systematically collected and reported.3 The private sector accounts for a larger share of services at the grassroots level, such as visits to community health centers and stations. Although most township health centers are government-run, almost half of all visits to grassroots providers were to village clinics, most of which are private. It is difficult to document precisely how much China’s private sector delivery has grown during the reform era because China’s official statistics only recently began separately categorizing public and private delivery.4 Health service providers also include specialized public health organizations such as the China Center for Disease Control (CDC), specialized disease prevention and treatment organizations, health education centers, maternal and child health centers, and family planning service centers, most of which are public.

2 These two paragraphs draw from Eggleston 2012, Milken Review. 3 See the Ministry of Health website for current statistics, available at http://www.moh.gov.cn/publicfiles/business/htmlfiles/mohwsbwstjxxzx/s7967/201112/53508.htm. 4According to the official definition, public (gongli) hospitals include state-owned and collective-owned hospitals. Non-public (minying) hospitals include joint ventures, cooperatives, purely private, and hospitals funded from sources in Hong Kong, Macao, Taiwan, or foreign countries. Prior to 2009, delivery organizations were categorized as for-profit or not-for-profit, but not by public and private ownership. In 2008, for-profit hospitals accounted for 4.0% of discharges and 4.4% of visits. For-profit providers account for a larger, albeit still minor, share of specialized inpatient services (13.7% of visits and 14.9% of discharges in 2008).

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Some national health reform goals are defined in terms of the future ecology of providers.

Specifically, authorities call for rejuvenating the three-tier network of providers, with a goal of each county having at least one “Grade 2B” hospital (secondary “medium-level” hospital) and several central township hospitals, at least one public; each administrative village having a clinic; and each [urban] neighborhood having a community health facility.

As shown in Figure 2, China’s health service delivery system does include a significant minority of non-government providers that differs significantly across provinces. There is no striking association between private share of services and regional per capita income. Of course, these statistics do not capture the extent to which the government directly contracts with or collaborates with private providers; the pattern of private engagement with per capita income is a subject we turn to below.

Distorted Incentives

Overall, we might argue that China’s health reforms have grappled with arenas of collaborative governance, without fully recognizing the implications of such an approach. The reforms have expanded government subsidies for social insurance and direct subsidies to providers. The expansion of insurance has been dramatic and largely effective, without either making enrollment mandatory or allowing much scope for insurance competition. The government has had to negotiate with an array of different public- and private-sector entities with deeply entrenched interests.

However, China’s health reforms to date have not fully addressed the severely distorted incentives that drive excessive spending growth and the misallocation of health resources. China continues to debate what to do about the disconnect between its presumption that government

9 hospitals should provide inexpensive, high-quality care for all, and the powerful financial incentives of those hospitals to exert payoff discretion by enticing patients to use profitable services (such as high-tech diagnostics and prescription drugs). Despite the apparently fundamental disparities between economic systems, precisely the same tensions exist in the

United States.5

The 2009 reform action plan in China uses verbal pleas rather than financial incentives in exhorting policymakers to “reverse the profit-orientated behaviors of public health care institutions and drive them to resume their commonweal nature….” (Yiyaoweisheng tizhi gaige jinqi zhongdian shishi fang’an 2009-2011nian 2009). The 2009 plan and its 2012 update call upon local governments to experiment with the restructuring of government hospitals to improve efficiency, quality, and responsiveness. Reform documents also encourage the establishment of private non-profit hospitals (a relatively new category in China, where “private” had been considered virtually synonymous with “for-profit”). However, government owner-managers of local hospitals have little incentive to welcome private competition. Similarly, the reforms explicitly welcome supplementary private insurance, but again leave to local jurisdictions the decisions regarding what, when, and for whom. Only a few localities have included private primary-care providers in the social-insurance network or contracted with them for public services (see a case study in Wang et al. 2013), although the most basic providers in China’s vast rural areas, the village doctors, have long operated on a private for-profit basis. The next phase of China’s health reforms aims to reform government hospitals and include private providers in

5 Health care in the US provides an area with valuable, sometimes sobering, lessons for China. Health care is a prominent but, for the most part, poorly performing arena for collaborative governance in the United States (Donahue and Zeckhauser 2011). The government pays about half the bill, but virtually all health care is actually delivered through the private sector. Because American public leaders have failed to recognize the basic underlying logic of collaborative governance in the design of programs, the private sector delivers care that is less effective, affordable, and accessible than might reasonably be expected. The Obama administration’s Affordable Care Act is the latest attempt to grapple with these inadequacies.

10 the new grassroots incentive system, the essential-medications system that removes profits from the dispensing of drugs directly to patients.

Some localities in China contract with private insurers to administer some aspects of its expanding health-insurance programs.6 Commercial insurance companies’ involvement in the reforms has been mostly as supplementary insurance coverage for the wealthy or for specific dread diseases, or in providing administrative-services for social health insurance plans. The percentage of social health insurance funds involved in contracting out to commercial insurers for administrative services remains limited, though it might expand in the future. 7

Government leadership with private sector participation also played a crucial role in

China’s recent effective response to the H1N1 influenza and current response to H7N9, a step forward over earlier troubling cases, such as the botched initial response to the 2003 Severe

Acute Respiratory Syndrome (SARS) outbreak. Even for core population health surveillance and response, the government increasingly must rely on relations with a series of private actors to carry out its role.

China’s 5-year plans illustrate the pattern of increasing mention of the private sector when articulating policies for health insurance and medical care, albeit with a later start than corresponding mention of minban schools and private role in other aspects of social services, cultural affairs, or scientific development (see appendix for summary of the 5-year plans since

1981 in English and Chinese). Recent initiatives and events suggest a genuine desire for a greater non-government role in the health sector. One recent example was the “Forum on Private

6 This paragraph draws from Eggleston 2012. 7 From Jan-Sep 2010, commercial insurers were involved in NCMS in 128 counties. They insured 345.5 million rural citizens and covered health payment of 1,820 million RMB (or $266 million) during the period. (http://www.moh.gov.cn/publicfiles/business/htmlfiles/mohncwsgls/s3582/201012/50149.htm) Also see MOH, Q&A about commercial insurers’ role in health reform, available at http://www.moh.gov.cn/publicfiles/business/htmlfiles/mohzcfgs/s9664/200904/40043.htm [accessed 1 January 2012].

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Medical Practice” held March 1, 2013 in Xiamen (with about 500 participants), where Minister of Health Chen Zhu encouraged private sector engagement. Another concrete example, welcoming foreign as well as domestic private sector engagement, is the January 2012 shift of foreign ownership of hospitals from “restricted” to “encouraged.”

Private Sector Engagement in 18 Cities

Different localities have taken contrasting approaches to social problems affecting China as a whole, including population health and medical services. We were curious whether approaches to specific public services differed systematically across cities, or were rather haphazardly heterogeneous, as we found for the US.8 A group of Fudan University students under our direction gathered information about health services and 8 other public services in 18 cities during January and February 2013. While the cities (or districts within mega-cities) cannot be construed as nationally representative, they do capture a broad range of geographic diversity and economic development, as shown in Figure 1 (map), Figure 3 (per capita income relative to the national average) and Figure 4 (population). The surveys involved a series of semi-structured interviews with local government agencies about the delivery and governance arrangements for nine public services: emergency medical transport (ambulance services); medical insurance and health care delivery; care for the elderly; care for the disabled; compulsory education (grades 1-

9); affordable housing construction and management; park management (gardening and landscaping); job training, and public transportation. We omitted one city from the statistical analyses because of lack of data for a sufficient number of services.

8 See our companion paper for this conference and Donahue and Zeckhauser (2011).

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The survey results confirmed what the national and provincial-level data suggested: although localities differ in the extent of private sector hospitals and clinics, in all surveyed cities the public sector continued as the dominant insurer and provider; few cities systematically contracted with private providers; and no cities adopted an explicitly collaborative approach in the health sector. Regarding hospital services, for example, interviewees voiced a pragmatic approach, mostly suggesting that more active engagement with private providers would only be justified if the private providers demonstrated quality comparable to their public counterparts.

“Private hospitals certainly deliver worse services than public ones, due to their limited resources and funds,” according to a government official of Jiading County, Shanghai. An official of

Harbin, Heilongjiang province stated that

“Private hospitals need to fight for their life and actively compete for patients. If we can have proper management, private hospitals could be truly beneficial, helping to share the burden on public hospitals and the government. Appropriate management and regulation are the most crucial factors.”

Thus, officials seem open to a more engaged or even collaborative approach if the benefits were to outweigh the costs. Indeed, some local governments have adopted joint ventures, like Cixi municipality in Zhejiang, with an ambitious Sino-American joint venture in inpatient care.9 More such examples may develop as China’s health sector develops further and domestic and foreign investors converge to domestic and international norms for inpatient service quality.

Consider a second health sector example—emergency medical services (ambulances).

Although this service involves private sector contracting in many other countries, Chinese law

9 CHC holds a majority stake (70%) in CHC International Hospital, a joint venture with the local municipal government of Cixi located in Zhejiang Province. With a total investment upwards of 870 million RMB, the hospital aims to admit its first patient by mid-2013. The Tier 3A 500-bed 80,000 square meter general hospital will replace the 150-bed Second People's Hospital that is now in place. http://www.chc-healthcare.com.

13 prohibits private provision of ambulance services in urban areas. Interestingly, some private participation in rural areas is under consideration to increase access, suggesting that the illegality of private involvement is not necessarily based on a principled objection (e.g. the hazard of manipulation of vulnerable patients), but rather on the expediency (e.g. need to elicit additional resources in rural areas, but requiring cities to adopt a direct provision model). Indeed, interviewees themselves gave mixed signals about whether private ambulance services should be rejected on principle, or whether a more innovative approach might deliver better public value, if ever implemented appropriately. As one ambulance driver in Jianshi County, Hubei Province, stated in an interview: “I think it almost impossible for private parties to contract ambulance services, because of specialization and high cost… Moreover, local people hardly understand the concept of private contracting. We have backward concepts.”

The next section presents a snap-shot of the government-private relationship in one key sub-sector that involves a large for-profit private role in most economies, including China: biomedical innovation.

Fostering Biomedical Innovation

China’s government recognizes that future economic development requires structural adjustment of the PRC economy as it converges toward the technological norm, facing the daunting challenge of innovation-led growth. Within the arena of government-promoted industrial innovation, biomedical innovation has been declared a national-level priority. In contrast with the earlier mode of government financing and within-government development (i.e. financing of government-run research institutes like the Chinese Academy of Science), more

14 recent policies and the 12th 5-year plan explicitly call for financing innovation through private companies. In a collaborative governance approach, the government might specify desire for innovation in a certain area where China bears a significant public health burden (e.g. tuberculosis), and then provide funding and incentives to private entrepreneurs and other firms to carry out the translational research that takes basic science and turns it into a commercial product for clinical care or public health use. But such an approach is full of hazards and complications.

Government procurement of vaccines is an example of a public goal that is usually fulfilled through pure contracting, but improving the quality of the manufacturing process requires collaboration with the private sector for information and productivity. For other pharmaceuticals and medical devices, the public health imperative plays less of a role, and local governments compete to attract firms to develop the local economy. Critics assert that China suffers from a proliferation of “science parks” or “biotech valleys” that waste resources without developing true synergistic industries, and private firms developing products that will benefit the middle-income population of the world but that might not be affordable to the local Chinese.

Another hazard of collaboration for innovation springs from the specifics of contracting and shared discretion. To grant research funds, government authorities understandably tend to rely on objective measures of success, such as citation counts of research publications and patents. But private sector leaders know that any profitable innovations (especially in the manufacturing process rather than the end product) suffer from the insecure intellectual property rights regime in China; therefore, inventors often do not publish but keep the IP to themselves, patenting only to head off the competition. As a result, objective measures fall short in capturing true innovation potential when government agencies select among applicants for funding.

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Also in China, public-private organizations for biomedical innovation are not well understood. There tends to be a bright line between public and private, and a mixed-form organization is difficult to understand and to pigeonhole, and therefore it can be challenging to fit in to China’s regulatory structure and common perceptions of what a firm or public agency should be.

Thus, although China does seek a collaborative approach for some arenas within the broader definition of the health sector, challenges to effective collaboration are numerous.

Within health insurance, medical services and public health, private engagement has been peripheral but seems poised to expand. China’s local authorities and central government will be increasingly challenged to understand and apply effective collaboration to reap the rewards associated with increased non-government roles in the health sector.

Next, we compare the heath sector to other sectors such as education, affordable housing, and long-term care.

A Comparison to the Non-Government Role in Primary and Secondary Education

China has been criticized for investing a relatively low share of its GDP in education, compared to other middle-income countries. In China, minban (“people-run”) schools have a long tradition as a form of collaboration for resources, even as early as the Mao era. Local governments in poverty-stricken rural areas often lacked the funds to pay a regular teacher; they would, therefore, elicit villagers’ support in housing and feeding a teacher and in building a school. As Hannum et al. (2008) note, “much of school finance in China during the Cultural

Revolution [1966-76] relied on local community support for minban, or people-managed,

16 teachers and schools…Education authorities ceded authority over state-managed elementary schools to local production teams or brigades, communes, factories, business enterprises, neighborhood revolutionary committees, etc…Minban teachers were paid in grain rations and supplementary cash wages…” (p.4). Thus, non-state schools arose during the Mao era and continued in different form into the contemporary reform era in China.

More recently, when Chinese government revenues as a share of the economy fell to a low of about 11% in the 1990s, many local governments were unable to pay teachers’ salaries on time or in full, leading to low morale, high turnover, and difficulty in guaranteeing a minimum quality of public school education in poor areas. In response, there was a resurgence of minban schools, often originally envisioned as a method to bring in additional resources for education

(see appendix summary of 5-year plans). The 1993 official policy encouraged schools run by social groups and individual citizens, and non-governmental schools grew rapidly, with some local education bureaus sending state-paid teachers to minban schools; “apparently the local education bureau personnel felt that this arrangement was a better use of resources than building a new government school” (Hannum et al. 2008, p.13). The percentage of education financing from government appropriations decreased from 85% in 1991 to 62% by 2004 (Hannum et al.

2008, p.11).

Table 1 shows that the share of private primary school enrolment rose from less than 2% in 2001 to over 5% in 2010. The share of middle school enrollment in private middle schools rose slightly more, from 2.5% in 2001 to slightly over 8% in 2010. However, the private share remains in the single digits, not unlike the private share of health care delivery. Thus, both services remain largely a government directly-provided service, with some private engagement at the margins that appears to be expanding, albeit at the same time that the government has

17 announced a renewed commitment to public financing.

The private sector role in education has evolved over time to fit new niches unfilled by the mainstream public schools. As in healthcare, these niches are not only at the elite end of the spectrum. For example, minban schools also have become a prominent means for municipalities to address the dilemma of primary and secondary education for the children of migrant workers.

Since minban schools require neither entrance exams nor residence registration, and since they can charge tuition levels targeted to their market niches, they have a degree of flexibility not available in traditional public schools. Their governance involves a range of collaborative arrangements, from relatively clear-cut contracting with a narrow purview, to full collaborative governance with broad private discretion. The latter arrangement is analogous to that of many charter schools in the US, which also tend to be targeted to disadvantaged children in urban areas.

But in China, the rationale, even in official documents, has been less about improving education than about acquiring additional resources, such as money and personnel.10 Although minban schools account for only a tiny fraction of the students in China, their contribution is evidenced by their total enrollment of over 9 million K-12 students, several times the number of students in all the US charter schools combined.

Results from our city survey help to illustrate the important role of minban schools in some localities and for some subpopulations. In Mianyang, Sichuan Province (with 20,053 RMB per capita income, private education plays a significant role in compulsory education, and

10 The Law on the Promotion of Non-Public Schools of the People’s Republic of China (12.28.2002) states “the present law shall be applicable to activities conducted by social organizations or individuals, other than the State organs, to utilize non-governmental financial funds to establish and run schools and other institutions of education which are geared to the need of society…. The State encourages donations to the establishment and running of schools. The State rewards and commends organizations and individuals that have made outstanding contributions to the development of the undertakings of non-public schools.” Peking University professor Qiren Zhou, who has studied China’s voucher system, asserts that [US economist] “Friedman expected that a voucher scheme could promote quality [productivity] of education by introducing more competition on the supply side. In China, we expect such a scheme could promote both quantity [resources] and quality [productivity] of education.” (http://www.ep-china.net/content/academia/c/20040225123637.htm).

18 officials deemed their educational quality to be relatively high. Private schools even attract students from outside Mianyang. The local government provides significant support to private education: they assign government-hired teachers to private schools, with official assurance that those teachers can return to the public schools; the government subsidizes private kindergartens; and one of the county governments under the larger municipality provides funding to a private middle school on the same terms as for public middle schools. Jiading District of Shanghai

(54,861 RMB per capita income) presents a second interesting case. Jiading hosts two types of minban schools: (1) those for migrant workers’ children with tuition and fees exempted, which are of lower quality but vital, since 56% of Jianding’s residents (常驻人口) are from other provinces; and (2) private corporate schools, perceived to be of higher quality, and also charging much higher tuition, operated independently by the private corporation sponsors under the general guidelines for compulsory education.

Affordable Housing

Urbanization is one of the great forces shaping China’s rise. Managing this large shift of population and providing affordable housing to the growing urban populace present distinctive challenges for governance. In 2010, 221 million Chinese migrated between urban and rural regions; and over the coming two decades, China’s cities are projected to absorb an astounding

335 million new residents (Peng 2011; Eggleston et al. 2013). For both the construction and management of affordable housing, collaborative governance might offer an attractive alternative.

How can China gain more of the benefits from private involvement in this area while lowering the costs, risks, and adverse effects? For example, the central government’s goal of increasing affordable housing requires aligning the incentives of both local governments (which

19 could obtain much higher revenues from allocating land to commercial use) and private developers (whose profit margins are capped for affordable housing construction, but who may seek good will and legitimacy by participating in low-income housing developments).

China’s localities employ three primary methods for working with private sector to provide affordable housing, only the third of which reaches into the realm of collaborative governance. First, municipalities have purchased previously constructed housing to offer to local residents as units for affordable housing, with these privately constructed units now owned and managed directly by the government. Second, the government sets standards for unit size and price and contracts with a private company to build the housing. Third, the local government can require commercial developers to designate a share of their new units as affordable housing, or even rely on the housing constructed and managed by employers its as meeting the quota for affordable housing.

In our 18-city survey, affordable housing emerged as an active arena of private sector engagement: the majority of housing bureau respondents indicated that they contracted with private firms, usually linked to a competitive bidding process, for construction of affordable housing, and occasionally for management. Indeed, more than three out of four cities had some form of private engagement for affordable housing construction and management. But none of the cases involved a significant amount of shared discretion.

Sometimes collaborative governance with the private sector helps local governments convert central government mandates into policies most consistent with local economic development. The private role in meeting affordable housing expansion targets well illustrates this case. For example, in southern coastal China, such as in Guangdong province, factories have long been staffed by migrant workers from other parts of the province and other provinces.

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Central government mandates for providing a sufficient number of affordable housing units come down each year. Although originally the central authorities had requested estimates of local demand from local governments, the localities had provided large estimates on the assumption that there would be central government subsidies for expanding housing supply.

When later it became evident that the new social housing would rely predominantly on local finance, local governments found that the mandated quotas for each year were onerously large.

Each province gave a quota to sub-province administrative areas (cities), which then sub- allocated quotas of housing units per year (to each district and county). For example, in one district we visited, the local authorities were told to build or otherwise provide over 100 social housing apartments, but only 21 households who met the eligibility criteria decided to live in the offered housing.11 The following year, the quota is to provide more units, but the effective demand seems limited (the local housing square footage is usually larger than that mandated for affordable housing units). What to do? Many local firms have built housing for their employees, including dormitories and cafeterias. These are effective benefits to offer workers who are migrating from long distances in search of work: benefits that are valued by the employees are not provided as cash wages and as such are exempt from the 28% social welfare taxes the employer “pays” on wage income. Thus, a win-win solution emerges: the firm builds and manages the housing; the local government counts the housing as part of its social housing quota.

However, this expediency does not exhibit true collaborative governance and brings its own hazards of private discretion. For example, problems stem from mismatch between the public goal and private implementation, because worker housing was constructed for singles and

11 Eligibility criteria is usually stable employment and residence in the area for at least 3 years, plus low income (e.g. less than 10,000 RMB per capita annual income).

21 sometimes couples somewhat like dormitories, not apartments for multi-generational families or even nuclear families.

Long-Term Care for the Elderly and Disabled

One aspect of the aging of China’s population is that younger generations have fewer children to care for their elders, and longevity has substantially increased. Therefore, the development of an eldercare industry has become imperative. China’s local jurisdictions have experimented with a range of options for coaxing private investments in long-term care for many tens of millions of elderly people. Interestingly, long-term care, especially care for the disabled, presents a few cases of collaborative governance across the 18 cities we surveyed. We suspect that motivation for this collaborative approach stems from wanting to attract resources, combined with trust that the social groups and non-profit organizations involved are unlikely to engage in preference distortion of the service since they have interests aligned more or less with the public goal of appropriate long-term care for the elderly and disabled.

Several interviewees in the cities we studied confirmed that long-term care was as yet not well developed, and few private for-profit providers found it attractive. “The biggest obstacle is attracting private firms, for it is almost impossible for a private company to run a profitable nursing home according to the national standard,” according to a government official of Cangnan county, Zhejiang Province. Another lamented, “admittedly, private nursing homes have ameliorated the shortage of supply and alleviated some of the pressure on the public sector.

However, due to their limited budgets, low quality facilities, and other problems, overall effectiveness is limited/moderate” (according to a government official from Yinchun,

Heilongjiang Province). Officials in some higher per capita income areas suggested that care

22 ought to be through direct delivery: “We do not encourage the private sector to be involved in the elder care (long term care) industry… Elder care should be undertaken by the government, since it is a costly activity, not a profitable business” (government officer, Jiading County,

Shanghai).

Approaches toward care for the disabled varied considerably city to city, with substantial private engagement. For example in Tai’an, the government contracts with several private companies to outsource care for the disabled, with at least one of those companies having acquired discretion and authority to discuss ideas for improving delivery of the service. In

Yichun, interviews revealed close collaboration between an NGO 'Volunteer Association'

(established in 2011) and the relevant government agencies. However, this volunteer associate is not a conventional civic society or purely volunteer group, but is closely associated with the city government. In Ninghai, services were provided by two private companies, with negotiation on some important aspects of care. In several other cities, there were no or few private participants.

Officials often suggested that the limited private sector involvement reflected the low government funding: “The government subsidy (for government procurement of care for the disabled) is quite low – merely 3600 yuan per patient. Private providers cannot sustain operations in such a situation,” according to a government official from Xishui County, Hubei

Province.

Discussion

The private sector role in China’s health sector is limited, although it varies across subcomponents—with little presence in population health, a small but growing presence in hospital services and supplementary health insurance, a slightly larger share in primary care, and a significant presence in medical devices, pharmaceutical manufacturing, and biomedical

23 innovation. The private presence in education is larger—comparable for compulsory education, and greater for preschool, vocational, and tertiary education. The private role in delivery is larger still in long-term care. Localities tend to adopt their own approaches to each service; we found little correlation across cities in the ratio of private engagement, or across services (Table 3).

There was a modest positive association between private engagement (measured as the

“collaboration ratio” in Figure 3) and GDP per capita in each municipality we surveyed.

With China’s low fertility rates and rapidly aging population, the need to invest significantly in the human capital of each young person, as well as to develop appropriate health services and long-term care services for the elderly and disabled, is clear. Collaborative governance in education and health care could be a critical part of China’s public mission in the early 21st century. Private-sector involvement in China’s basic health services and primary and secondary education arguably should move from collaboration predominantly for resources toward collaboration for productivity, as the quality of the private sector services develops and the government enhances its capacity to orchestrate shared discretion to promote public value.

Collaborative approaches toward social services almost surely will play an increasingly important role in China’s future. In terms of macroeconomic balance, as well as the force of demographic change, China’s economy will be moving toward a greater share of domestic consumption (compared to the unprecedentedly large scale of savings and investment currently), as well as greater development of the service sector and social protection system to reduce precautionary savings and spur consumption. Services such as health care and insurance and long-term care will inevitably grow as a result of these trends, as well as China’s rising per capita income and the accompanying greater expectations of the public for service accessibility and quality. To deliver on these promises, China’s local governments would do well to consider

24 carefully, among the spectrum social protection services, the comparative advantage of collaborative governance for development of each service.

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26

Figure 1. Map of 18 Cities

Yichun Jiading Yichun Cixi Cangzhou

Changyi

Tai’an

Lianyungang Yan’an Pudong

Mianyang Ninghai

Shapingba Ningguo

Jianshi

Yidu Xishui Cangnan Figure 2a. GDP per capita and private share of hospital outpatient visits, Chinese provinces, 2010 16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00% 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000

Figure 2b. GDP per capita and private share of inpatient admissions, Chinese provinces, 2010 18.00%

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00% 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000

Figure 2c. GDP per capita and private share of hospital beds, Chinese provinces, 2010 25.00%

20.00%

15.00%

10.00%

5.00%

0.00% 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000 Figure 3. Per capita income of our sample of Chinese cities 200,000

180,000 Pudong

160,000

140,000

120,000

100,000

80,000 Cixi 60,000 Ninghai Tai'an Yan'an Jiading 40,000 Ningguo Cangzhou Mianyang Yidu Harbin Changyi 20,000 Yichun Jianshi Lianyugang National Average Cangnan ‐ Xishui Figure 4. Population of our sample of Chinese cities (1000 people)

10,000.0 9,000.0 8,000.0 7,000.0 6,000.0 5,000.0 4,000.0 3,000.0 2,000.0 1,000.0 ‐ Figure 5. "Collaboration ratio" vs. GDP per capita 1.20

1.00

0.80

0.60

0.40

0.20

0.00 ‐ 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000

The city‘collaboration ratio’ or index is defined as the total score across services, with 0 for direct provision, 1 for contracting with non-government parties, and 2 for collaboration. Table 1. Non‐government share of compulsory educational enrollment, 2001‐2010, and non‐government share of inpatient health services, 2006‐2012

Education 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 Primary school enrollment (total) 99407043 100714661 105640027 107115346 108640655 112462256 116897395 121567086 125434667 Private primary school enrollment 5376255 5028766 4487915 4120907 3889404 3283213 2749341 2221370 1818438 Share of private primary school 5.41% 4.99% 4.25% 3.85% 3.58% 2.92% 2.35% 1.83% 1.45% Middle school enrollment (total) 52759127 54409415 55849710 57361947 59579491 62149442 64750006 66184186 66040609 64310539 Private middle school enrollment 4421129 4339810 4285782 4127735 3943973 3739046 3156837 2565747 2024687 1583552 Share of private middle school 8.38% 7.98% 7.67% 7.20% 6.62% 6.02% 4.88% 3.88% 3.07% 2.46%

Health Care 2012 (1‐11) 2011 2010 2009 2008 2007 2006 Number of Beds in Hospitals (total) 3705172 3387437 3120773 2882862 2675070 2445012 Number of Beds in Non‐public Hospitals 461270 373669 328229 273226 230356 144102 Number of Outpatient Visits at Hospitals (100 22.04 22.6 20.4 Million) Number of Outpatient Visits at Non‐public 2.11 2.1 1.66 Hospitals (100 Million) Number of Inpatients in Hospitals (total) 10860 10755 9524 (10,000) Number of Inpatients in Non‐public Hospitals 1103.9 1047 800 (10,000)

Source: PRC Statistical Yearbooks and Ministry of Health webpage (http://www.moh.gov.cn/zwgkzt/pwstj/list.shtml; accessed April 2013) Table 2. Private (non‐government) involvement in health service delivery in China, 2010, by region

Number of outpatient visits (10,000) in hospitals Number of Inpatients (10,000) in Hospitals Number of Beds in Hospitals GDP per capita

Private (Non‐ Private Private (Non‐ Public Non‐public Public Non‐public Public Non‐public Region Total public) Toal (Non‐public) Toal public) Hospital Hospital Hospital Hospital Hospital Hospital percentage percentage percentage

Total 203963.3 187381.1 16582.2 8.13% 9523.8 8724.2 799.6 8.40% 3387437 3013768 373669 11.03% Beijing 9337.6 8656.0 681.6 7.30% 171.3 158.7 12.6 7.36% 85775 75272 10503 12.24% 78194 Tianjin 4333.4 3874.0 459.4 10.60% 93.4 89.0 4.4 4.71% 40387 36387 4000 9.90% 79153 Hebei 7474.9 6749.6 725.3 9.70% 516.5 473.1 43.4 8.40% 172956 151560 21396 12.37% 28796 Shanxi 3644.4 3307.6 336.8 9.24% 214.2 193.6 20.6 9.62% 108260 92431 15829 14.62% 27267 Inn Mongolia 2827.4 2665.6 161.8 5.72% 158.1 151.6 6.5 4.11% 67016 62936 4080 6.09% 49467 Liaoning 6652.3 6232.4 419.9 6.31% 366.9 341.2 25.7 7.00% 160894 148104 12790 7.95% 42285 Jilin 3553.4 3265.1 288.3 8.11% 201.5 187.8 13.7 6.80% 89341 78903 10438 11.68% 31693 Heilongjiang 4508.4 4269.8 238.6 5.29% 273.4 263.1 10.3 3.77% 123928 115859 8069 6.51% 26006 Shanghai 10489.9 10107.9 382.0 3.64% 211.6 205.5 6.1 2.88% 84825 79207 5618 6.62% 93488 Jiangsu 15042.1 12789.6 2252.5 14.97% 558.8 466.9 91.9 16.45% 195340 156806 38534 19.73% 52448 Zhejiang 15668.1 14704.6 963.5 6.15% 435.5 401.1 34.4 7.90% 150986 133469 17517 11.60% 52421 Anhui 5609.1 4858.0 751.1 13.39% 372.7 326.5 46.2 12.40% 123427 104583 18844 15.27% 19768 Fujian 6563.3 6060.9 502.4 7.65% 268.9 247.3 21.6 8.03% 80896 72788 8108 10.02% 39617 Jiangxi 4263.0 4029.9 233.1 5.47% 253.6 235.9 17.7 6.98% 77805 71301 6504 8.36% 21284 Shandong 12357.1 11276.4 1080.7 8.75% 755.8 701.2 54.6 7.22% 255764 228026 27738 10.85% 42014 Henan 10347.1 9615.9 731.2 7.07% 624.1 589.6 34.5 5.53% 220974 206382 14592 6.60% 23842 Hubei 7710.1 7354.1 356.0 4.62% 424.3 406.3 18.0 4.24% 135006 126384 8622 6.39% 27339 Hunan 5869.5 5543.6 325.9 5.55% 470.7 440.1 30.6 6.50% 150141 140859 9282 6.18% 23798 Guangdong 25748.0 23887.6 1860.4 7.23% 710.7 651.6 59.1 8.32% 224114 199018 25096 11.20% 47689 Guangxi 6057.1 5773.6 283.5 4.68% 292.3 283.0 9.3 3.18% 88913 84180 4733 5.32% 18348 Hainan 1165.0 1108.0 57.0 4.89% 53.1 51.8 1.3 2.45% 18807 18026 781 4.15% 24505 Chongqing 3403.7 3087.1 316.6 9.30% 179.6 159.1 20.5 11.41% 64827 56012 8815 13.60% 29948 Sichuan 9820.7 8792.2 1028.5 10.47% 557.5 487.5 70.0 12.56% 184828 157982 26846 14.52% 20458 Guizhou 2536.8 2200.4 336.4 13.26% 211.9 178.4 33.5 15.81% 69343 57648 11695 16.87% 11640 Yunnan 5710.3 5089.0 621.3 10.88% 333.8 284.4 49.4 14.80% 112493 92523 19970 17.75% 16049 Tibet 339.0 298.7 40.3 11.89% 12.2 11.7 0.5 4.10% 5444 5172 272 5.00% 19483 Shaanxi 4924.5 4418.6 505.9 10.27% 288.0 263.4 24.6 8.54% 104819 92844 11975 11.42% 27267 Gansu 2646.2 2514.0 132.2 5.00% 149.0 142.0 7.0 4.70% 63773 58185 5588 8.76% 14459 Qinghai 813.6 786.0 27.6 3.39% 41.1 39.1 2.0 4.87% 16226 15198 1028 6.34% 22442 Ningxia 1131.5 1011.6 119.9 10.60% 56.0 52.0 4.0 7.14% 20258 17807 2451 12.10% 25760 Xinjiang 3416.0 3053.4 362.6 10.61% 267.2 242.0 25.2 9.43% 89871 77916 11955 13.30% 23080 Source: See Table 1, and ChinaDataOnline (based on statistical yearbooks) for regional GDP per capita. Table 3. Correlation of private engagement for provision of 9 services : correlation across services (Matrix 1) and across cities (matrix 2)

Correlation Matrix 1

Emergency Health Insurance Care for the Gardening and Employment Compulsory Affordable Public Elderly Care Medical Services & Services Disabled Landscaping Training Education Housing Transportation Emergency Medical Services 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Health Insurance & Services 0.00 1.00 ‐0.10 ‐0.16 0.15 ‐0.10 0.00 0.13 0.00 Elderly Care 0.00 ‐0.10 1.00 0.57 0.00 ‐0.14 0.15 0.00 0.00 Care for the Disabled 0.00 ‐0.16 0.57 1.00 0.54 ‐0.23 ‐0.16 ‐0.19 0.00 Gardening and Landscaping 0.00 0.15 0.00 0.54 1.00 ‐0.39 ‐0.49 0.00 0.00 Employment Training 0.00 ‐0.10 ‐0.14 ‐0.23 ‐0.39 1.00 0.50 0.20 0.00 Compulsory Education 0.00 0.00 0.15 ‐0.16 ‐0.49 0.50 1.00 0.21 0.00 Affordable Housing 0.00 0.13 0.00 ‐0.19 0.00 0.20 0.21 1.00 0.00 Public Transportation 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Correlation Matrix 2 Harbin (Nangang Yan'an Yichun (Yichun Xishui (Qingquan Cangzhou (Xinhua Cangnan Mianyang Tai'an Ninghai Changyi Pudong Jianshi Yidu Lianyungang Jiading Cixi District and Ningguo (Baota District) Town) District) Xiangfang District) District) Cangnan 1.00 0.09 ‐0.38 0.47 0.50 0.17 0.00 ‐0.58 0.73 0.73 0.73 0.42 0.11 ‐0.32 0.73 0.73 0.00 Mianyang 0.09 1.00 ‐0.43 0.29 ‐0.58 ‐0.41 0.00 0.10 0.57 0.04 0.04 0.23 ‐0.18 ‐0.27 0.04 0.04 0.00 Tai'an ‐0.38 ‐0.43 1.00 0.00 1.00 0.87 0.00 0.61 ‐0.29 0.00 0.00 ‐0.29 0.88 0.88 0.00 0.00 0.00 Yichun (Yichun District) 0.47 0.29 0.00 1.00 0.00 0.00 0.00 0.00 0.50 0.66 0.66 0.50 0.29 ‐0.14 0.66 0.66 0.00 Ninghai 0.50 ‐0.58 1.00 0.00 1.00 0.00 0.00 0.00 0.00 0.58 0.58 0.58 0.90 1.00 0.58 0.58 0.00 Changyi 0.17 ‐0.41 0.87 0.00 0.00 1.00 0.00 0.58 0.61 0.61 0.61 0.17 0.92 1.00 0.61 0.61 0.00 Xishui (Qingquan Town) 0.00 0.00 0.00 0.00 0.00 0.00 1.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Pudong ‐0.58 0.10 0.61 0.00 0.00 0.58 0.00 1.00 0.41 0.00 0.00 ‐0.61 0.41 0.41 0.00 0.00 0.00 Cangzhou (Xinhua District) 0.73 0.57 ‐0.29 0.50 0.00 0.61 0.00 0.41 1.00 0.75 0.75 0.47 0.18 ‐0.26 0.75 0.75 0.00 Jianshi 0.73 0.04 0.00 0.66 0.58 0.61 0.00 0.00 0.75 1.00 1.00 0.91 0.80 0.50 1.00 1.00 0.00 Yidu 0.73 0.04 0.00 0.66 0.58 0.61 0.00 0.00 0.75 1.00 1.00 0.99 0.95 0.98 1.00 1.00 0.97 Lianyungang 0.42 0.23 ‐0.29 0.50 0.58 0.17 0.00 ‐0.61 0.47 0.91 0.99 1.00 0.99 0.98 0.99 0.99 0.95 Jiading 0.11 ‐0.18 0.88 0.29 0.90 0.92 0.00 0.41 0.18 0.80 0.95 0.99 1.00 0.95 0.98 0.98 0.91 Cixi ‐0.32 ‐0.27 0.88 ‐0.14 1.00 1.00 0.00 0.41 ‐0.26 0.50 0.98 0.98 0.95 1.00 0.99 0.99 0.99 n (Nangang District and Xiangfang Dis 0.73 0.04 0.00 0.66 0.58 0.61 0.00 0.00 0.75 1.00 1.00 0.99 0.98 0.99 1.00 1.00 0.98 Ningguo 0.73 0.04 0.00 0.66 0.58 0.61 0.00 0.00 0.75 1.00 1.00 0.99 0.98 0.99 1.00 1.00 0.98 Yan'an (Baota District) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.97 0.95 0.91 0.99 0.98 0.98 1.00 Appendix: China’s 5‐year‐plans since 1981: Mention of non‐government role in science and technology, cultural affairs, health care, social security, and education

6th Five Year 7th Five Year 8th Five Year 9th Five Year 10th Five Year 11th Five Year 12th Five Year Plan Plan Plan Plan Plan Plan Plan Covered years 1981-1985 1986-1990 1991-1995 1996-2000 2001-2005 2006-2010 2011-2015 Science and - Launch pilot - Enhance -Establish - Utilize innovation - Accelerate Technological programs to collaboration enterprise tech vibration of establishing the integrate scientific between research innovation different types of market-driven research and institutes, mechanism to enterprises, technological production. universities, and encourage and especially SMEs. innovation system - Realize the enterprises. guide enterprise - Encourage led by enterprises. economic value - Encourage to build R&D technological - Encourage big realization of technological centers. research-oriented companies to scientific research-oriented - Promote institutes to increase research. institutes to innovation become high-tech investment in become high-tech capacity of SMEs. companies of to R&D. companies or to - Make enterprise be integrated as -Give tax credits be integrated as the major entity part of large for R&D costs of part of large for technological companies firms. companies. research and -Establish and - Make innovation. enhance patents enterprises the - Encourage trading market. major entities for technological technological research-oriented research. institutes to become high-tech companies of to be integrated as part of large companies Education - Simplify policies - Adopt different -Gradually build - Accelerate - Support minban - Encourage and and distribute ways, different the new system school operation education guide minban power to loose investment, and led by the institution reform, development. education. education different forms to government and actively Form the structure - Realize the regulations. provide education. incorporating all encourage and that public equal status of - Enhance - Encourage and parts of society in support school education and minban schools education laws. support social education investment and minban education and public schools resources provision. operation by develop together. by law. Further invested schools. - Encourage various types of - Diversify schools enhance school collaboration of social recourses. funding sources. operation various forms of - Form the Compulsory regulations. school investment structure that education will to utilize government wholly be education schools being the supported by resources. major entities, government. High public schools and schools are minban schools majorly funded by developing government. balanced. Occupational and - Encourage high level universities to education are outsource their supported by both logistic government and departments. social investment. Health Care -Stick to the - Enhance principle that regional health government leads care planning. and society Encourage and participates. guide social capital and foreign capital to invest in health institutes. Open up permissions for such investment to diversify hospital forms. - Actively promote private health care insurance to enhance health care system. Cultural - Activate the - Further reform - Deepen reforms -Guide and - Accelerate incentives for sports regulation in cultural, regulate non- reforms in non- socially ran sports system. Promote broadcasting, public owned profit cultural to provide more membership and filming, news, and entities to enter entities. Discover sports facilities. associations in publishing. the cultural and establish certain types of Develop a flexible, industry. Form an corporate sports. scientific industry pattern in governance - Build the management which public approaches. structure that system and entities lead, Innovate government and cultural product various types of operational society develop operating system. ownership entities institution of public the sports projects develop together. cultural services. together. Take the - Encourage socialization and social investment industrialization in sports sector. approach. Social Security - Diversify - While actively - Encourage - Reform provision funding sources develop social qualified working methods of basic for social security. insurances, units to establish public health Reform social actively develop enterprise services. security private insurance annuities and Introduce management to supplement supplementary competition system, ensure social security. health care system, expand the combination of - Actively develop insurance. service socialized fund enterprise - Actively develop outsourcing, to management and supplementary private insurance realize the contributions of endowment to supplement diversification of working units. insurance and social security. provider and personal savings - Develop and provision endowment enhance senior approaches. insurance. service sectors. - Promote non- basic public service markets reform. Lower market entry berries, encourage social investment to participate in different ways to satisfy various demand of the people. - Guide social investment to participate in public housing development. Citations: 1.《中华人民 共和 国国经济 民和社发 会展第 六个计 五年划（ 摘要 ）》“The Outline of the Sixth Five‐Year Plan for National ， Economic and Social Development of the People's Republic of China” http://www.ndrc.gov.cn/fzgh/ghwb/gjjh/W020050715581805733448.pdf

2.《中华人民 共和 国国经济 民和社发 会展第 七个计 五年划（ 摘要, “The Outline of the Seventh Five‐Year Plan for National ）》 Economic and Social Development of the People's Republic of China” http://www.ndrc.gov.cn/fzgh/ghwb/gjjh/P020070912631354979640.pdf

3.《中华人民 共和 国国经济 民和社发 会展十规 年划 和 第八计 个五划纲 年要》“The Outline of the Ten Year Plan and the ， Eighth Five‐Year Plan for National Economic and Social Development of the People's Republic of China” http://www.ndrc.gov.cn/fzgh/ghwb/gjjh/P020070912638554392927.pdf

4.《中华人民 共和 国国经济 民和社发 会展“ 九五计 ”划和 2010 年远景目标纲要》“The Outline of the Ninth Five‐Year Plan and 2010 Long Term Objectives for National Economic and Social Development of the People's Republic of China” http://www.ndrc.gov.cn/fzgh/ghwb/gjjh/P020070912638573307712.pdf

5.《中华人民 共和 国国经济 民和社发 会展第 十个计 五年划纲要》“The Outline of the Tenth Five‐Year Plan for National Economic and Social Development of the People's Republic of China” http://www.ndrc.gov.cn/fzgh/ghwb/gjjh/P020070912638588995806.pdf

6.《中华人民共和国国民经济和社会发展第十一个五年规划纲要》“The Outline of the Eleventh Five‐Year Plan for National Economic and Social Development of the People's Republic of China” http://politics.people.com.cn/GB/1026/4208451.html

7.《中华人民共和国国民经济和社会发展第十二个五年规划纲要》“The Outline of the Twelfth Five‐Year Plan for National Economic and Social Development of the People's Republic of China” http://www.ndrc.gov.cn/fzgh/ghwb/gjjh/P020110919592208575015.pdf

6th Five Year 7th Five Year 8th Five Year 9th Five Year 10th Five Year 11th Five Year 12th Five Year Plan Plan Plan Plan Plan Plan Plan Covered years 1981‐1985 1986‐1990 1991‐1995 1996‐2000 2001‐2005 2006‐2010 2011‐2015 Science and 试办各种形式的科 加强科研院所、高等 建立企业技 发挥各类企业特别是 加快建立以企业为主 Technological 研、生产的联合体或 院校和企业之间的联 术创新体系鼓励并引 中小企业的创新活 体、市场为导向、产 “一条龙”，实行科研 合与合作，推动以技 导企业建立研究开发 力，鼓励技术革新和 学研相结合的技术创 成果有偿转让制度 术开发为主的科研院 机构,推动企业成为 发明创造。 新体系，使企业真正 等，使科学技术与经 所进入大型企业集团 技术进步和创新的主 深化技术开发类院所 成为研究开发投入、 济、社会发展更紧密 或转 体建立.为中小企业 企业化转制改革和社 技术创新活动、创新 地结合起来。 化为高技术企业，鼓 服务的技术创新支持 会公益类科研机构改 成果应用的主体。增 励大中型企业自办技 系统,提高中小企业 革 强科研院所和高校创 术开发中心。努力使 创新能力.加强产学 新动力，鼓励大型企 企业成为技术研究开 研结合建设一批行业 业加大研发投入，激 发的主体。 共性技术的开发基 发中小企业创新活 地.鼓励应用开发型 力. 。全面落实企业 科研院所进入企业或 研发费用加计扣除等 改制为企业积极推进 促进技术进步的税收 社会公益性科研机构 激励政策。实施知识 改革. 产权质押等鼓励创新 的金融政策。建立健 全技术产权交易市 场。 Education 要简政放权，改变国 成人教育。继续采取 逐步形成政府办学为 加快办学体制改革 支持民办教育发展， 鼓励引导社会力量兴 家对各级各类学校管 多种途径、多种力 主与社会各界参与办 积极鼓励支持和规范 形成公办教育与民办 办教育，落实民办学 得过多过死的状况。 量、多种形式办学， 学相结合的新体制。 社会力量以多种 教育共同发展的办学 校与公办学校平等的 经过试点，逐步推行 大力开展岗位培训。 提倡多种形式的联 形式办学.基本形成 格局。形成多元化的 法律地位，规范办学 以中心城市管理高等 合办学，优化配置和 政府办学为主公办学 教育投入体制，义务 秩序。 学校的管理体制。加 促进教育事业发展的 充分利用现有教育资 校和民办学校共同发 教育由政府负全责， 强教育立法，逐步建 主要措施是：中央和 源。 展的格局.深化教育 高中阶段教育以政府 立系统的教育评价和 地方各级政府要逐步 管理体制改革进一步 投入为主，职业教育 监督制度。 增加对教育的投入， 转变管理方式.依法 和高等教育实行政府 继续多方面、多渠道 落实高等学校办学自 投入与社会投入相互 地筹措教育资金，提 主权推进高校后勤服 补充。 倡和支持社会办学， 务社会化改革. 逐步充实和改善办学 条件，并努力提高教 育资金的使用效益； 继续深入开展教育体 制改革，逐步完善各 类教育的管理体制和 办法；加强师资队伍 建设，努力提高教师 的思想政治素质和业 务素质。 Health Care 贯彻预防为主、依靠 坚持政府主导、社会 完善区域卫生规划， 科技进步、动员全社 参与、转换机制、加 鼓励和引导社会资本 会参与、中西医并 强监管的原则 举办医疗机构，放宽 重、为人民健康服务 社会资本和外资举办 的 医疗机构的准入范 方针，同时把医疗卫 围，形成多元办医格 生工作的重点放在农 局。 村。 积极发展商业健康保 险，完善补充医疗保 险制度。 Cultural 充分调动社会办体育 进一步改革体育管理 深化文化广播影视新 引导和规范非公有制 发展健身休闲体育， 的积极性，努力增 体制，有条件的运动 闻出版体制改革建立 经济进入文化产业， 开发体育竞赛和表演 加群众体育运动的场 项目要推行协会制和 科学合理灵活高效的 形成以公有制为主 市场，发展体育用 所和设施。 俱乐部制。形成国家 管理体制和文化产品 体、多种所有制共同 品、体育中介和场馆 与社会共同兴办体育 生产经营机制 发展的文化产业格 运营等服务，促进体 事业的格局，走社会 局。深化体育改革， 育事业和体育产业协 化、产业化道路。 鼓励社会力量兴办体 调发展。加快推进公 育事业和投资体育产 益性文化事业单位改 业。 革，探索建立事业单 位法人治理结构，创 新公共文化服务运行 机制。 Social Security 要通过多种渠道筹集 要调动各方面的积极 在大力发展社 鼓励有条 改革基本公共服务提 社会保障基金。改革 性，加快住房建设， 会保险的同时，积极 件的用人单位为职工 供方式，引入竞争机 社会保障管理体制， 形成国家、集体、个 发展商业保险，发挥 建立企业年金和补充 制，扩大购买服务， 坚持社会化管理与单 人 对社会保障的补充作 医疗保险.同时发挥 实现提供主体和提供 位管理相结合，以社 三结合筹资建房的机 用。 商业保险对社会保障 方式多元化。推进非 会化管理为主。继续 制。 大力发展企业补充养 体系的补充作用. 基本公共服务市场化 发扬我国家庭、亲友 老保险和个人储蓄养 加强老年人服务设 改革，放宽市场准 和邻里间互助互济的 老保险。 施建设发展老龄事业 入，鼓励社会资本以 优良 和产业. 多种方式参与，增强 传统。 多层次供给能力，满 足群众多样化需求。 社会保障制度：发挥 商业保险补充性作 用。 加快发展慈善事业， 增强全社会慈善意 识，积极培育慈善组 织，落实并完善公益 性捐赠的税收优惠政 策。 引导社会力量参与保 障性住房建设运营。