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China and India Trade Lessons in Education and Health
Phenomenal growth in China and India has drawn attention to their relative performance in various spheres, but there has been little comparison of their education and health systems. Comparing these systems can illuminate their worthiness as examples for one another and for the rest of the developing world.
The different patterns of economic development appear to mirror the differing education models. |
India has focused on higher education for a few, while China has focused on basic education for the masses. As one would expect, India enjoyed a competitive edge over China in higher education until very recently, while China has outperformed India in primary and secondary education. Both models have contributed to economic growth but are likely to produce very different distributional outcomes.
India can learn from China how to improve the efficiency of public education, particularly by providing appropriate incentives to teachers and schools, whereas China can learn from India how to expand private higher education. India is unusual, however, in that it has benefited from a broad base of English-speaking workers. The universal education strategy of China might be safer for other countries to emulate.
Both countries have made substantial gains in life expectancy and disease prevention, but neither health system offers much protection against financial risk. Both countries should restructure health care financing to reduce out-of-pocket costs; increase access to care for the poor, especially in rural areas; modify hospital capabilities to suit local needs; make patient satisfaction a higher priority; reduce the overuse of health services associated with regulated prices; and strengthen communicable disease surveillance and control.
Figure 1 —Adult Literacy in China Has Climbed Higher Than in India | ||||||||||||||||||||||||||||||||
UNESCO Institute for Statistics, Custom Tables. As of November 10, 2008.
NOTE: 1981 data are for India; 1982 data are for China. | ||||||||||||||||||||||||||||||||
Figure 2 —For Decades, India Has Had a Higher Percentage of Adults Who Have Ever Attended College Than Has China | ||||||||||||||||||||||||||||||||
SOURCE: “International Data on Educational Attainment: Updates and Implications,” Cambridge, Mass.: Harvard University, Center for International Development, Working Paper No. 42, April 2000, Robert J. Barro, Jong-Wha Lee, Appendix Data Tables. As of November 7, 2008.
NOTE: “Adult” refers to those age 15 and over. | ||||||||||||||||||||||||||||||||
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China should emulate two aspects of India’s health system: greater involvement of the private sector, where medical students increasingly prefer to work, and reduced regulation of prices. For example, the overutilization of newly marketed drugs in China is a very problematic issue that raises concerns about wasteful spending as well as quality of care. The Chinese government should focus on regulating the quality of drugs rather than their price.
India should emulate two aspects of China’s health system: greater spending on basic national health infrastructure, such as clinics and preventive care services at the village level, and greater efforts to reduce preventable deaths from communicable diseases and from poor maternal and infant health. The Indian government should commit more resources to improving hygiene, water quality, and nutrition.
Education as Destiny
Since the end of the Chinese Civil War in 1949, China has made great strides in educating the masses. The primary school gross enrollment rate (which includes those who do not belong in the relevant age group for a given level of education) reached 100 percent in 1985. The secondary gross enrollment rate rose above 70 percent in 2003, representing a huge increase from 40 percent in 1960. Most impressively, the adult literacy rate soared from about 20 percent in the late 1940s to 93 percent in 2007 (see Figure 1).
India, on the other hand, devoted a large proportion of its education resources to higher education, particularly in science and technology. This has resulted in a higher percentage of college-educated people than in China (see Figure 2). This has also left India with some of the finest institutes of higher education, notably the Indian Institutes of Technology and the Indian Institutes of Management. Meanwhile, the Indian population at large remains uneducated. According to 2004 data, India, with an adult literacy rate of 61 percent, lagged far behind China’s 91 percent and was barely even with sub-Saharan Africa. India’s female adult literacy rate of 48 percent in 2004 was actually lower than that of sub-Saharan Africa’s 53 percent.
The different patterns of economic development appear to mirror the differing education models. A larger labor pool with basic education has allowed China to attract large-scale manufacturing plants. Education has equipped Chinese workers with the basic skills for manufacturing and allowed them to travel from rural areas to the jobs in urban areas. In contrast, a larger stock of college-educated, technically savvy, English-speaking labor has made India a choice destination for international software and services outsourcing.
Developing countries in Africa and the rest of Asia can draw lessons from the contrasting experiences of China and India. Countries with little disparity in education achievement tend to have smaller variations in income. Those with concentrated education attainment are more likely to see larger income gaps. Japan and the East Asian “Tigers” are good illustrations of the former, while Latin America is often cited as an example of the latter. Persistent inequality can derail economic reforms by removing political support for them.
China also offers an excellent example of how school choice and merit-based teachers’ salaries can provide incentives to achieve higher performance. In Chinese public schools, teacher salaries usually include a fixed component and a bonus component that depends on student scores. Students can attend schools outside their neighborhoods, provided they pay “choice fees” to the chosen schools. Better performance allows a school to charge higher fees in the local education market. Evidently, this market-based approach has worked well in China, and India could explore similar strategies.
India’s experience with private higher education offers a possible direction for China. In 2005–2006, private higher education accounted for 31 percent of total higher education enrollment in India, compared with a modest 9 percent in China. The proliferation of private institutes has greatly helped to expand the higher education capacity in India at a time when public enrollment and capacity have increased only marginally. Private institutes, typically more sensitive to labor market conditions, also have the potential to improve the relevance of higher education, a concern for both India and China.
AP IMAGES/MUSTAFA QURAISHIStudents work with their teacher in the chemistry department of the private Amity University in Noida, India. If Amity’s founder has his way, in less than a decade it will be the center of a vast chain of private universities, feeding a ravenous middle-class appetite for education left unsatisfied by the country’s public university system. |
Health as Wealth
Overall, people in China live longer, healthier lives than do people in India. The difference for women is larger than that for men, owing in part to the tenfold greater maternal death rate during childbirth for Indian women compared with Chinese women (see the table). Furthermore, China has achieved better prevention and control of communicable diseases. Noncommunicable diseases, particularly chronic obstructive pulmonary disease and cancer, now account for 77 percent of all deaths in China. In India, by comparison, more than 40 percent of all deaths are still due to communicable diseases, including HIV/AIDS, diarrheal diseases, respiratory infections, and perinatal conditions.
The health systems in both countries provide little protection from financial risk. In China, medical expenditures have become a principal cause of poverty, swelling the number of rural households that are below the poverty line by 44 percent. In India, up to a third of hospitalized patients are impoverished by medical costs.
The heavy burden of health costs in China and India is not surprising given the lack of well-developed health insurance schemes in both countries. This situation is exacerbated by two factors. First, the lack of access to affordable care means that people defer preventive and other necessary care; consequently, when they do seek care, they typically have a more serious and costly medical condition. Second, for those who seek care, physician-induced overutilization of care further increases the financial burden.
The chief challenge for both systems is to reduce the out-of-pocket burden on individuals. This can be accomplished by providing nationalized or social insurance, as is common in Europe, or by encouraging private insurance, as is common in the United States. China is leaning toward the former, whereas India seems to be favoring the latter. But both public and private insurance should be considered in both countries to meet a diversity of needs.
The reduced focus on public health . . . may be one of the most important health issues emerging in each country. |
To contain costs further, both countries should consider alternative reimbursement mechanisms, such as prospective payment systems that cover predetermined amounts of money, similar to how Medicare operates in the United States. Both China and India should also consider vertically integrated provision of health insurance and health care, similar to health maintenance organizations.
AP IMAGES/EUGENE HOSHIKOOutside Changzhou, a sprawling industrial city in eastern China, sits a small factory farm processing chemicals from pig guts into heparin, a blood thinner that has been linked to 19 deaths and hundreds of allergic reactions. |
In the 1980s, both countries faced pressure to increase the role of the private sector in providing health care services. But health care privatization has had some negative effects. Citizens of both countries now bear greater burdens in financing their health care needs. In addition, the private sector has a greater incentive to provide curative rather than preventive treatments. The reduced focus on public health, especially on the prevention of communicable diseases and on the promotion of healthy lifestyles, may be one of the most important health issues emerging in each country.
Both China and India face the critical challenge of increasing access to care for the poor. Both countries need to build more primary health care facilities and to better manage existing facilities. Special attention should be paid to improving access to care in rural and remote areas by expanding their programs for education, screening, immunization, and transportation assistance. Ensuring resources for preventive and basic curative care will help local clinics and community hospitals continue to exist and improve.
China and India account for more than 40 percent of the world population. The health policy choices of these two countries not only will affect their citizens but also could give policymakers around the world ideas for coping with their own health care challenges. 
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