A revelatory story emerged in China this spring: Bo Xilai, Chongqing’s powerful Communist Party head, was stripped of both his post and party membership and accused of shocking abuses of power, including covering up his wife’s alleged involvement in the death of a shadowy British businessman.

On May 2, the Shorenstein Asia-Pacific Research Center held a special seminar to make sense of what this unusual high-level scandal could mean for the future of China’s current political system, erupting just months ahead of a once-in-a-generation leadership transition.

Minxin Pei, director of the Keck Center for International and Strategic Studies at Claremont McKenna College, said the scandal is a severe test for the Chinese Communist Party (CCP), which balances on a knife’s edge as it prepares to replace the majority of its Politburo members—the highest CCP echelon. The Bo affair has exposed the existence of serious corruption at a very high level of government, calling into question the party’s image and credibility.

“This is the biggest threat to party unity since 1989,” he said.

More potentially damaging still, however, is the negative light it has cast on China’s overall political system. The scandal has revealed weaknesses and loopholes in the power structure, and the government’s poor crisis management skills.

“The Bo Xilai affair is the beginning of the end of the Tiananmen era,” Pei said. “Twenty years from now, historians will make this point.”

Xueguang Zhou, a professor of sociology and Freeman Spogli Institute senior fellow, agreed with Pei’s analysis that Bo’s fall from power has tarnished the party’s image and deeply disrupted the cohesiveness of its upper leadership.He spoke also of the outpouring of criticism on social media sites for the government’s inability to reign in corruption—so much so that censors have not been able to keep up.

“These voices have been so fierce in criticizing the top leadership that it has huge implications for the emergence of China’s civil society,” Zhou said. 

He expressed his concern for the future of local politics after the smoke from the Bo affair has cleared. Although it is widely acknowledged in China that shady political dealings go hand-in-hand with local-level politics, positive innovations in governance also frequently occur at the city and county level.

“I hope that local governments will still have the power to experiment,” he said.

After all is said and done, China’s top leadership is at a major turning point. Only time will tell the full impact of the fall of Bo Xilai, both during this year’s power transition and the evolution of China’s government structure in the coming decades.

China’s demographic landscape is rapidly changing, and the government has responded by launching ambitious social and health service reforms to meet the changing needs of the country’s 1.3 billion people. This week, officials approved a five-year plan to develop a comprehensive nationwide social security network.

Karen Eggleston, the Asia Health Policy Program (AHPP) director and a Stanford Health Policy fellow, discusses the success of China’s health care reforms—including its recently established universal health care system—and the long road still ahead.

Why is the overall health and wellbeing of China’s population important globally?

There are many reasons why the health of China’s citizens matters within a larger global context. On the most basic level, China represents almost 20 percent of humanity. But it is also a major player in the world economy and it depends on having a healthy workforce, especially now that its population is aging more. The government’s ability to meet the needs of its underserved citizens contributes to a more productive and stable China, and works towards closing the huge gaps we see in human wellbeing across the world.

China also potentially offers a model for other developing countries, such as India, that may want to figure out how to make universal health coverage work at a tenth of the income of most of the countries that have put it into place before.

What are some of the biggest changes in China’s health care system since 1949?

One of the most significant changes is that China has achieved very basic universal health insurance coverage in a relatively short period of time.  

Throughout the Mao period (1949–1978) there was a health care system linked to the centrally planned economy, which provided a basic level of coverage via government providers with a lot of regional variation. When economic reform came in 1980, large parts of the system—particularly financing for insurance—collapsed. The majority of China’s citizens were uninsured during the past few decades of very rapid social and economic development.

China’s overall population is changing quite dramatically, which means it has different health care needs, such as treating chronic disease and caring for an increasingly elderly population. The central government is trying to establish a system of accessible primary care—a concept that China’s barefoot doctors helped to pioneer but that fell into disarray—and health services that fit these new needs. 

How does China’s basic health care system work? Are there segments of the population still not receiving adequate coverage and care?

China has had a system where people can select their own doctors. Patients usually want to go to clinics attached to the highest-reputation hospitals, but of course, when you are not insured you almost always by default go to where you can afford the care. “It is difficult to see the doctor, and it is expensive” has been the lament of patients in China, so an explicit goal of the health care reforms has been to address this.

The term “universal coverage” has different definitions. China initially put in place a form of insurance that only covers 20 or 30 percent of medical costs for the previously uninsured population, especially in rural areas. Benefits have expanded, but remain limited. As with the previous system, disparities in coverage still exist across the population. China not only has a huge population with huge economic differences, but within that there is a large migrant worker population. It is a challenge to figure out how to cover these citizens and how to provide them with access to better care. The government is quite aware there are segments of the population not receiving equal coverage, and it continues to strive to resolve the issue.  

What are the greatest innovations in China’s health care system in recent years?

One of the most remarkable things China has achieved is really its new health insurance system. Even if the current coverage is not particularly generous it is nearly universal, and mechanisms are put in place each year to provide more generous coverage. China is also working on strengthening its primary care and population health services, infusing a huge sum of government money into these efforts. It is the only developing country of its per-capita income that has achieved such results so far.

Interestingly, a lot of people assume China achieved its universal coverage by mandate, while in fact the central government did so by subsidizing the cost for local governments and individuals. This reduces the burden, for example, on poorer rural governments and residents, and is one innovative way China is trying to eliminate the disparity in access to care.

Eggleston has recently published a working paper on China’s health care reforms since the Mao era on the AHPP website, as well as an article in the Milken Institute Review.

Gordon Liu, a Chinese government advisor on health care and the executive director of Peking University’s Health Economics and Management Institute, spoke at Stanford on May 29 on the future of China’s health care system.