About the Author
Lincoln C. Chen is President of the China Medical Board, an independent American foundation for advancing health in China and Asia. He was Founding Director of the Harvard Global Equity Initiative, Taro Takemi Professor of International Health, and Director of the Harvard Center for Population and Development Studies. Dr. Chen is Chair of the Board of BRAC USA and former Chair of the Board of CARE/USA.
Tony Saich is Director of the Ash Center for Democratic Governance and Innovation and Daewoo Professor of International Affairs at Harvard Kennedy School. Saich is a trustee member of International Bridges to Justice and the China Medical Board.
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Philanthropy for Health in China
By Jennifer Ryan, Lincoln C. Chen, Tony Saich
Indiana University PressCopyright © 2014 The China Medical Board
All rights reserved.
The Collapse and Reemergence of Private Philanthropy in China, 1949–2012
Wang Zhenyao and Zhao Yanhui
In order to better understand the opportunities and challenges for contemporary health philanthropy in China, this chapter aims to provide a brief overview of the evolving relationship between health care, philanthropy, and the state since the founding of the People's Republic of China in 1949. It first considers the period 1949–1977, which saw the creation of a state health care system, as well as an increasingly antagonistic governmental stance toward philanthropy, which was perceived as antithetical to the socialist project. Next it discusses the rehabilitation of health philanthropy from 1978 to 2003. This period was characterized by the recognition that health philanthropy could play a crucial role in compensating for an increasingly insufficient state health care system. Various laws were enacted that facilitated the gradual revitalization of health philanthropy, with nongovernmental organizations developing alongside governmental ones, and international involvement increasing throughout the period. The overview is completed by a summary of developments since 2004, the year in which the Fourth Plenary Session of the 16th CCP Central Committee explicitly recognized the importance of the development of philanthropy to the state social security system. The chapter then concludes by identifying certain significant challenges for the current development of health philanthropy in China and offering some predictions for the future.
State Health Care Provision and the Elimination of Health Philanthropy in the People's Republic of China, 1949–1977
Soon after coming to power in 1949, the Chinese Communist Party (CCP) began implementing a new state welfare system. The institutional guideline, as articulated by leading CCP member Dong Biwu in 1950, was that "social relief and welfare should be in the hands of the government, while individuals and groups can participate in governmental relief activities and organizations" (Dong 1950). This indicated that future grassroots involvement would be coordinated by the state, and the role of nongovernmental philanthropic organizations was to be curtailed—a point emphasized in Dong's accompanying statement that charity should be considered as "an icing that deceives and anesthetizes the people," and a "conspiracy to sabotage the PRC by imperialists" (Dong 1950).
Private health charities had been one of the main driving forces behind the development of medical care in China in the turbulent transition period of the early twentieth century, but rather than continuing to operate as independent entities they became subsumed under government control. This process can be demonstrated by the fate of the nine largest shantang in Guangzhou. Shantang were benevolent societies, first arising in the late Ming dynasty, typically founded by Chinese gentry and merchants. The Guangzhou shantang (Aiyu, Guangji, Fangbian, Guangren, Huixing, Chongzheng, Runshen Society, Shushan, and Mingshan) provided various forms of medical treatment and medicine for free. Within the first few years of the PRC they were all either integrated and reformed into government-controlled structures or closed down. Some were transformed into hospitals or clinics and others into schools. For example, Huixing and Aiyu were placed under unified leadership and integrated into the Guangzhou Public Welfare Associations Union in 1954, as the First Clinic and Second Clinic of the Municipal Public Welfare Associations Union, respectively. In 1952 Fangbian Hospital was expanded, becoming Guangzhou First People's Hospital. Guangji Hospital was closed down in 1954 due to dilapidation. Its building was converted into Guangji Non-Staple Food General Market. Runshen Society came under the leadership of the Municipal Public Welfare Associations Union in 1954 and ceased offering medical services, becoming instead the Ronghua Street Primary School (Tan 2008). This was a pattern repeated across the country and by November 1953 over 1,600 old charitable organizations in 21 cities had been reorganized under state control.
The role of international philanthropy in China during this period was also greatly diminished—especially following the outbreak of the Korean War in 1950 and the ensuing decline in Sino-U.S. relations, as almost half of the relief agencies and religious organizations that received foreign grants were subsidized by the United States. Following new government rulings in 1950 that effectively cut ties with the United States and other foreign philanthropic entities, the government began to integrate, adjust, and reform the existing international health philanthropies operating in China (Zhongyang Renmin Zhengfu fazhi weiyuanhui 1982, 724–727). For example, the China Medical Board, an American organization created by the Rockefeller Foundation, had to cut its ties with the institution it had built when the Peking Union Medical College (PUMC) was nationalized in 1951. The new government took charge of other institutions that had been established by international charities; hence when the American Friends Service Committee ceased operating in 1951, its properties were transferred to the Department of Civil Affairs. These various adjustments effectively resulted in the extinction of foreign charities operating in China.
In addition, the government determined that it would turn down future offers of international assistance. On August 21, 1954, in "Answering Foreign Journalists' Questions," the General Administrative Office of the Ministry of Internal Affairs elaborated on the guidelines of the Chinese government for the acceptance of foreign aid and donations for disaster relief, stating that "in principle, China welcomes the friendly assistance from international friends, however, Chinese people can pull through disasters, helping ourselves by engaging in production" (Fang 1995, 383).
Alongside the integration of both domestic and foreign-funded organizations into state-controlled structures, several new government-run welfare and relief agencies were established to perform the function of social assistance (Zhou and Zeng 2006, 363). These included the China Association for the Blind (1953) and the China Association for the Deaf (1956), which later merged in 1960. Meanwhile, collective welfare facilities such as sanatoriums, nursing homes, orphanages, and rest homes for the disabled were built into the Trade Union system. According to statistics, between 1949 and 1954, 666 welfare agencies for the disabled, the elderly, and children were built or reformed (Su 2011, 107). These welfare relief agencies were included in the financial budget at all levels under government administration. Overall government administration of charities was coordinated by the Chinese People's Relief Association from 1950 to 1956, at which time its undertakings were transferred to the Ministry of Internal Affairs.
Such organizations functioned as a supplement to the national health care security system that was being implemented by the government, and which was divided along urban and rural lines. The majority of urban residents were covered by two insurance schemes. From 1951, a state-funded Government Insurance Scheme provided free medical and health care services for serving and retired state officials, staff at government agencies, public institutions and universities, and handicapped military officers (Wong and Chiu 1997, 77). This was later extended to the dependents of the aforementioned groups and also to university students. A Labor Insurance Scheme covered employees of state-owned factories and enterprises (and subsequently their dependents), with the costs borne mainly by the enterprises, and requiring only a small contribution from workers (Ma, Lu, and Quan 2008, 939). The majority of China's vast rural population was insured under the Cooperative Medical System (CMS). This was a prepaid, collectivized health security program funded by contributions from individual peasant households and brigade (village) and commune (county) welfare funds, with an additional government subsidy. Much rural health care was provided by barefoot doctors—physicians with only a few months' training who offered a range of basic medical services to the rural populace, utilizing both Western and Chinese medicine (Wong and Chiu 1997, 77–78). By 1956 there were over 2,100 hospitals at the county level, 20,000 rural medical centers, and 41,000 clinics. By 1976, 90 percent of administrative villages (production brigades) had adopted the CMS, accounting for over 80 percent of the rural population (Xu 2009, 11). The achievements of this new health care system should not be underestimated: from 1952 to 1982 average life expectancy in China rose from 35 to 68 years, while infant mortality fell from 200 to 34 deaths per one thousand live births. The success of public health projects is reflected in the fact that, by the 1980s, chronic illnesses rather than infectious diseases were the main cause of death (Blumenthal and Hsiao 2005, 1166).
In theory, a fully realized social security system negated the need for health philanthropy, which was, after all, ideologically anathema to a communist project that believed the state itself could provide equal cradle-to-grave care for all. However, the health care security system was not without its flaws. There was great urban-rural disparity between the standards of care offered, and medical services were frequently limited, falling short of satisfying all the people's needs. In particular, with the rural CMS—where the main source of funding was from money paid into the system by farmers—as grassroots collective economic productivity decreased, there was an increased fiscal burden placed on farmers and the raising of sufficient funds to finance the system became more difficult. In addition to such systemic failings within the health care security system, China also suffered a series of large-scale natural disasters during this period, including the Three Years of Great Chinese Famine (which was much exacerbated by policy failings) from 1958 to 1961 and later the Tangshan earthquake of 1976. The ten years of the Cultural Revolution (1966–1976), meanwhile, only served to worsen an already severe lack of medicine, medical equipment, and doctors. During those years class struggle was rife and there was no exemption for the medical world: various medical facilities were destroyed and many doctors fell victims to political purges.
The great irony is that both the regular shortfall experienced in health care services, particularly in the countryside, and the more extreme instances of natural disasters were very much the contexts within which philanthropic health organizations might have played a significant ameliorating role. Yet throughout this period an ideologically hidebound government attempted to shoulder all the responsibilities regarding public health, despite this exceeding its financial and organizational capacity. Indeed, rather than coming to the fore in these times of crisis, the notion of philanthropy and private charity was further stigmatized as sugarcoated bullets from the bourgeoisie. A small but striking example is the case of a Shanghainese worker in the 1970s who mailed two hundred renminbi as a disaster relief donation to the local governments of the disaster-stricken Anhui and Guizhou Provinces, only to be rebuked as "harboring evil intentions and ulterior motives" (Zhu 1997). On a larger scale, in 1976, after the Tangshan earthquake, various countries offered emergency aid and medical supplies to China, but these offers were all refused by the Chinese government (Zhou and Zeng 2006, 365).
Furthermore, during the Cultural Revolution the many charities and official welfare and relief agencies that had been established or reorganized during the early years of the PRC were all dissolved. The Red Cross Society of China had developed rapidly in its organization and service capacity since being reformed and made subject to the Ministry of Health in 1950, and by 1966 it had more than five thousand grassroots organizations throughout the country and over five hundred thousand members. But after the Cultural Revolution began, the society was excoriated as a "feudal, capitalistic, and revisionist" force. Its branch offices at all levels were abolished and its main staff were dismissed or transferred to Cadre Schools (Red Cross Society of China 2008). The China Association for the Blind and Deaf stagnated, and in 1969 the Ministry of Internal Affairs, which administered governmental charitable agencies, was dissolved (Zhou and Zeng 2006, 379).
Philanthropy was beholden to the political ideology of the time. It was curtailed not only by direct policies, which abrogated the existence of philanthropic organizations, but also indirectly by wider economic and social policy: as economic development foundered in the wake of a series of misguided political campaigns there was a scarcity of social wealth. Even if there had been political space allowed for the operation of (domestic) health philanthropies, their efficacy would have been severely limited by a lack of resources. Philanthropy had become a river without a source and it would require significant political and economic transformation for this situation to change.
The Rehabilitation of Health Philanthropy, 1978–2003
Such transformation did begin to take shape from 1978 onward, as Deng Xiaoping pressed forward with a series of institutional reforms following the Third Plenary Session of the 11th CCP Central Committee. The reshaping of the state-society relationship precipitated by the Reform and Open Up policy was to have far-reaching ramifications for health philanthropy in China. The development of the market economy brought an end to the putative equal distribution of wealth in the country and weakened ideological resistance to the notion of philanthropy. The potential for more grassroots control of wealth laid the financial basis for the development of new philanthropy. Meanwhile increasing international interaction with China offered the possibility of renewed cooperation with foreign medical and philanthropic groups.
Crucially, at the same time as the potential for philanthropic development emerged, the need for its existence became more pressing, particularly in the case of philanthropy for health. After 1978, central government funding of both health care and public health initiatives fell greatly, with the financial burden transferred to provincial and local authorities. From 1978 to 1999 the central government's share of national health care spending fell from 32 percent to 15 percent. Inevitably this led to growing disparity between richer and poorer provinces, alongside increasing privatization of the health care system (Blumenthal and Hsiao 2005, 1166). In urban areas the transition to a market economy saw many state-owned enterprises either shut down or become private or joint-venture enterprises. A new urban employee health insurance program was introduced to replace the former Government Insurance and Labor Insurance Schemes. This covered employees of both state-owned and private enterprises, but required greater employee contributions, and did not cover employee's dependents (Ma, Lu, and Quan 2008, 940). The most dramatic change, though, occurred in rural areas where the CMS collapsed due to the dismantling of the agricultural communes, which had provided the financial basis for the rural medical system. No longer able to pool finances to insure against risk, individual households were forced to cover expenses themselves and "900 million rural, mostly poor citizens became, in effect, uninsured overnight" (Blumenthal and Hsiao 2005, 1166). Between 1979 and 1989 the percentage of villages with cooperative medical insurance schemes fell from 90 percent to less than 5 percent (Wong and Chiu 1997, 78).
In 1985, the government promulgated several health reform policy issues, which approved for the first time the operation of private medical services. Furthermore, with political dogma no longer strictly opposed to the concept of private charity, and against the backdrop of an ever-increasing wealth gap and the collapse of the former health security system, new philanthropic organizations began to emerge. In 1981, the China Children and Teenagers' Fund (CCTF), which describes itself as "the first independent nonprofit charity organization in China" (China Children and Teenagers' Fund 2013), was founded, and the following year the Soong Ching Ling Foundation was established, with Deng Xiaoping as honorary president. To what extent foundations such as these can truly be described as "independent" is debatable. They may more accurately be termed government-organized nongovernmental organizations (known as GONGOs), operating with a degree of autonomy but still under the supervision of the government. The CCTF, for instance, was primarily endowed and is still supervised by the All-China Women's Federation (originally a mass organization supported by the CCP) and regulated by the Ministry of Civil Affairs. The place of GONGOs in the Chinese philanthropic landscape is discussed at greater length in Deng Guosheng and Zhao Xiaoping's chapter in this volume. However, irrespective of the level of independence these new organizations had from state intervention, they clearly marked a significant development from the Maoist era. Charitable organizations were no longer regarded as "an icing that deceives and anesthetizes the people," but were being recognized as a helpful and necessary addition to a struggling state health care service.
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Table of Contents
PrefaceIntroduction: Philanthropy for Health in China: Distinctive Roots and Future Prospects / Lincoln Chen, Jennifer Ryan, Tony SaichSection I: Revitalization after Collapse1. The Collapse and Re-emergence of Private Philanthropy in China, 1949-2012 / Zhenyao Wang and Yanhui Zhao2. Shifting Balance of Philanthropic Policies and Regulations in China / Mark Sidel3. Changing Health Problems and Health Systems: Challenges for Philanthropy in China / Vivian Lin and Bronwyn CarterSection II: Chinese Roots and Foreign Engagement4. Medicine with Mission: Chinese Roots and Foreign Engagement in Health Philanthropy / Xiulan Zhang and Lu Zhang5. American Foundations in Twentieth Century China / Zhongyun Zi and Mary Bullock6. Connecting Philanthropy with Innovation: China in the First Half of Twentieth century / Darwin Stapleton7. International Philanthropic Engagement in Three Stages of China's Response to HIV/AIDS / Ray Yip8. Gender and Reproductive Health in China: Partnership with Foundations and the United Nations / Joan Kaufman, Mary Ann Burris, Eve W. Lee, and Susan Jolly9. Foreign Philanthropic Initiatives for Tobacco Control in China / Jeffrey Koplan and Pamela RedmonSection III: Transitions and Prospects10. GONGOs in the Development of Health Philanthropy in China / Guosheng Deng and Xiaoping Zhao11. The Red Cross Society of China: Past, Present and Future / Caroline Reeves12. More than Mercy Money: Private Philanthropy for Special Health Needs / Li Fan13. Charitable Donations for Health and Medical Services from Hong Kong to Mainland China / David Faure14. Towards a Healthier Philanthropy: Reforming China's Philanthropic Sector / Yongguang XuGlossaryContributorsIndex