OECD SLAMS CHINA'S LOW PUBLIC HEALTH SPENDING

The Organisation for Economic Co-operation and Development (OECD) has criticised China for spending too little on healthcare. A recent report, entitled Challenges for China's Public Spending: Towards Greater Effectiveness and Equity, claims that public health expenditure may not be sufficient to meet the needs of the population. In 2002, official spending on health, culture and science in China was budgeted at 5.5% of GDP, compared with an average of 28.2% in OECD member countries.

Part of the problem is that the local authorities in China — which are responsible for funding health — are poorly resourced and restricted by a lack of autonomy. Meanwhile, the government system for transferring funds is inefficient and prone to wastage. As a result, local governments have to resort to "unofficial" levies and charges in the health sector to make up funding shortfalls. This has opened the floodgates to alleged corruption and treatment inequities in recent years.

The report calls for an increase in China's spending on health, citing the fact that 50% of the urban population and 80% of the rural population lack any kind of medical insurance. Other proposals include improving transparency by bringing unofficial spending into the official budget, reducing bureaucracy, and setting performance targets for local authorities in key areas such as health and education.