(And that’s just health care, you also have pensions and education, each with about fifty different interest groups.)

So putting together a health care system is vastly more complex than becoming an export powerhouse.

Also China became an export powerhouse by accident. There was as far as I know, absolutely no master plan in the mid-1990′s to dramatically increase Chinese exports. It’s just that there were about five different things that just happened between 1993 and 1999 that did this. For that matter, pretty much no one in 1978 ever really intended China would end up as “capitalist” as it did.

Health care is the same way. Most of the last decade has been spent on pilot projects in which they set something up in some sample county somewhere and see how it works or doesn’t work.

There really is no one in China opposed to universal health care, the trouble is that it’s just a massively difficult thing to do. If you read the World Bank’s reports on NCMS you get an idea of how messy it is. What do you set the deductibles at. Who do you call if you have a billing issue?

And even if it is place, Chinese are not going to trust it for another decade.

Huizer: In China there will be something when the warlords find it in their interest, and it may well be local, rather than national.

I think the term warlords is misleading because it mischaracterizes how much power local officials and or don’t have. Warlords have their own military forces, and that is something that is under very tight control by the central government.

The other issue is that warlords have their independent sources of finance whereas most local governments in China are dead broke because they are barely keeping up with education spending.

Because building infrastructure is easy. You say build this highway. A lot of officials make money when the highway gets built, and it’s done. Any money that gets siphoned off in the form of corruption and bribery is a one time event, and it doesn’t matter as long as the road or port gets built. The other thing is that it’s pretty easy to engineer a road. People basically know what a road looks like, whereas it’s really tough to figure out how to design a good health care system.

With health and education the payments are ongoing and it’s a tremendous challenge to get payments to the right people and away from the wrong people. Also if you do it wrong, then it is tremendously hard to undo.

Also, given the fact that the United States has be trying and failing to have universal health care for the last fifty years, I don’t think that it’s wise to think that there is something wrong with China that has to cover five times as many people with five times less resources, but still has managed to put something together in fifteen.

” One question: why would building a social safety net take decades? China built a global exporting powerhouse in around 10 years, so decades (as opposed to a decade) feels a bit slow …”

Is that a rhetorical question?

China (unless the Mao era managed to fool me completely) had a lot of basic things not so long ago, and together they constituted a sort of safety net (though the more capricious episodes of the Mao (what is his Temple name by the way?) tended to overwhelm it). Mao’s successors (1) demolished most of this and (2) started to export cheap, embodied labor as a CCP version of Asian export oriented developmentalism. And that strategy worked extremely well and resulted in (1) plenty of money to finance imports (2) remigration of industrial and managerial skills that had moved out during/before the Mao era (HK, Taiwan) and which seeded what we are seeing now in the 1990s, attracted by cheap, socialized, trainable labor and an environment that was hungry for industrial modernization (no greenies etc) (3) healthy growth of infrastructure (4) and opportunity to develop an indigenous consumer base, but one with un-western characteristics.

The leadership may feel that a modest set of institutions (like Singapore, excellent health care, education and a mandatory old age scheme, but little for the unemployed and the careless) would actually be useful (and popular as well) but That would mean dealing with the enormous collective action problems embedded in this non-model. Essentially, the citizens lack any capacity to organize themselves towards this. The barons do not like it and are well organized for obstruction. An alliance between the Centre and the citizens is difficult to imagine. The problem is that China is neither a dictatorship (a benevolent dictator would be able to hire a few consultants and implement one in a very short time) nor a democracy (at least one with substance) where a political movement might promote it (and the design and implementation would be problematic, but ultimately there would be something) and either legitimately establish one or legitimately fail to do so.

In China there will be something when the warlords find it in their interest, and it may well be local, rather than national.

That could be accelerated if the foreigners became more demanding of the conditions under which their exports are made. And as China’s CA surpluses become more and more problematic internationally (unemployed workers are the most powerful agents of protectionism, especially in democracies), probably the pressure to reform (i e raise Chinese production costs) may well increase. The PIN includes many suggestions to that effect. In fact, currency appreciation (and not only against USD) may, in the short term, be easier to handle than reform. But if reform could be structured to give the centre more control, that might be more attractive.