The Chinese government has managed a gradual liberalisation of the labour market over the past twenty years. This paper explores the process in the health sector. The strategy has been to establish a broad policy framework within which individuals and enterprises are encouraged to adapt.
Whilst this has allowed the economy to adjust gradually it has also allowed people to profit from opportunistic behaviour. Uniform pay levels across China were once the norm. Now, more successful health establishments can earn higher revenue from user charges and drug sales and can pay staff bonuses. Staff in poorer areas do not even receive the basic salary. Health workers are resorting to informal methods of earning an income. The paper concludes that the Chinese government will have to establish a new regulatory framework that permits health workers to earn a reasonable income, whilst encouraging them to provide effective and affordable health services.
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