ANNUAL REPORT

143
lifetime cost of bringing the estimated 260 million migrant workers
and their families to the urban social service system would be
around $3.1 trillion (RMB 20.8 trillion). 41 In August 2016, the
State Council announced it would create a national basic public
service market to include services such as pension, healthcare, and
compulsory education, 42 which would address some of these disparities
and allow for greater portability of benefits, but it remains
to be seen how this policy will be implemented.
Meanwhile, restrictions on migration to China’s megacities and
richer eastern provinces remain in place. 43 For example, Shanghai’s
2016–2040 plan aims to keep the city’s population at 25 million
by 2040; in 2014, the number of residents totaled 24.3 million.
44 To control migration, Beijing,* Shanghai, Guangzhou, and
Tianjin—megacities with more than five million residents each—
maintain a points system based on factors such as employment,
housing, educational background, and skill level for migrants to
earn those cities’ hukou. 45 This system is, in effect, rigged against
migrants, who are usually unable to meet the necessary qualifications.
46
Healthcare
The Chinese government is continuing efforts begun under the
12th FYP to create a high-quality, affordable, and accessible
healthcare system.† From 2011 to 2015, the Chinese government
successfully expanded its basic health insurance to provide nearuniversal
coverage, but Dr. Wu cautioned this insurance covers
only a limited number of services. 47 The Chinese government also
spent $1.3 trillion between 2008 and 2014 to bring down the share
of Chinese citizens’ out-of-pocket healthcare spending from 40 percent
in 2008 to 32 percent in 2014. 48 However, soaring medical
costs, overcrowding at large hospitals, and substandard care ‡ remain
key challenges. 49 Actual healthcare costs increased three-fold
from $150.3 billion in 2004 to $456.9 billion in 2014, and are expected
to continue to grow as the population ages (see Figure 1). 50
Based on a joint estimate from the World Bank, World Health Organization,
and three Chinese government agencies, without reform,
real healthcare expenditures will increase an average of 8.4
percent annually from $526.7 billion (RMB 3.5 trillion) in 2015 to
$2.4 trillion (RMB 15.8 trillion) in 2035. 51
dkrause on DSKHT7XVN1PROD with USCC
* In September 2016, Beijing Municipality stopped classifying residents within its municipality
as urban or rural. This change affects 2.9 million residents, formerly classified as ‘‘rural,’’
who live in surrounding towns and villages that have been subsumed by Beijing. Wang Su and
Li Rongde, ‘‘Beijing Scraps Urban-Rural Hukou Distinction,’’ Caixin, September 20, 2016.
† For more information on China’s healthcare industry, see U.S.-China Economic and Security
Review Commission, Chapter 1, Section 3, ‘‘China’s Healthcare Industry, Drug Safety, and Market
Access for U.S. Medical Goods and Services,’’ in 2014 Annual Report to Congress, November
2014, 127–171.
‡ Interest in high-quality medical treatment has led a growing number of Chinese citizens to
travel to the United States. For more information, see Matt Snyder and Nicole Stroner, ‘‘Chinese
Tourism and Hospitality Investment in the United States,’’ U.S.-China Economic and Security
Review Commission, July 25, 2016. 10–12.
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