MERICS Press releases, China Flash header


Digital solutions drive reforms from health care to education

Faced with the enormous challenges of a rapidly changing society and economy, China focuses on innovative models and digital solutions to revolutionize the provision of social services. China’s leaders recognize that the country’s future is at risk unless they are able to guarantee equal access to quality health care, education, housing and employment.  The country’s recent advances in all these areas have helped narrow the gap with developed countries and could even serve as models for developing countries.

The new MERICS report, “Serve the people. Innovation and IT in China’s social development agenda,” examines new social policy approaches in all these areas – from the provision of affordable urban housing to the alleviation of poverty in rural areas. “The provision and access to high-quality public services are important for economic and political stability in China,” write the editors Matthias Stepan and Jane Duckett.

Ten social policy experts from four continents examine new policy directions and measures under the administration of President Xi Jinping and Premier Li Keqiang since 2012/2013 in five important areas: health, education, housing, poverty alleviation and disability employment.

Focus shifts from economic growth to social equality

The world’s most populous country faces gigantic social policy challenges. China’s society is rapidly ageing and the wealth and income gap between urban and rural areas is as wide as never before. Rapid urbanization and the privatization of state-owned enterprises have left many citizens without access to public social services – and many local governments lack the funds to provide them.

The Chinese government is acutely aware of the urgency of these problems. In the first two decades of the 21st century, it has shifted from an almost exclusive obsession with economic growth to the delivery of public services across the population. Between 2010 and 2016, China increased its spending on social services on average by 10 percent every year.

In his foreword, Klaus Rohland, the former World Bank Country Director for China, praises China’s approach to rolling out new policies. In the health care sector, China follows the model of its economic reforms in the 1980s: new policies are tested in local experiments before they are implemented nationwide.


Experiments and technology: overcoming the “tyranny of distance”

China has also introduced digital solutions to overcome the “tyranny of distance” in its vast country. In the health care sector, IT and big data help to connect patients and providers. Employment initiatives for disabled people focus on e-commerce business models. The success of information technologies has remained more limited in other areas. In schools, for example, digital learning and teaching methods clash with China’s traditional education system. China also has a long way to go in connecting its vast rural hinterland to the digital age. The Chinese government invests  substantially in IT infrastructure. Yet, as of now, only 53 percent of Chinese have access to the internet. According to Stepan and Duckett, digital solutions are not necessarily a panacea. “There remains a significant digital divide in Chinese society, meaning that IT solutions might aggravate economic and social inequality.

Whereas China struggles to address the inequality between rich coastal regions and poor inland provinces, it has gained praise for its success in reducing absolute poverty. Yet even today, China remains far removed from OECD standards on certain indicators, such as access to basic sanitation. China’s next ambitious goal is to eradicate remaining poverty by 2020. According to Rohland, this will not be easy. “Investments in poverty alleviation may become more expensive as China moves to address persisting poverty in very remote areas or among severely disadvantaged groups.

The central government does not shoulder all of these investments, but takes on the role of a coordinator. “One overarching finding of this paper is that the Chinese leadership does not aim at direct social service provisioning by the state, with the exception of guaranteeing a subsistence minimum for the neediest groups,” write Stepan and Duckett. Instead, the party-state tries to regulate and closely supervise the provision of public services by multiple non-state actors – including private companies and NGOs.” For example, 35,000 private companies are asking for donations to support the CCP’s poverty alleviation agenda.

China has put forward credible strategies,” as Rohland writes. “The next step will be to implement the ambitious central plans across its vastly different regions and localities. If the new policies yield positive outcomes in the long-run, China would serve not only as an example for a highly adaptive policy process, but also for a global model for policy innovations that help to meet the challenges of providing public services in the 21st century.”

Click here to download the MERICS Paper on China "Serve the people. Innovation and IT in China’s social development agenda” as PDF.

Media contact