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The Chinese health sector developed alongside the establishment of a centrally planned economy organized into state-owned enterprises in the cities and agricultural collectives in the rural areas. During the late 1970s the government began radically to restructure the economy. The major theme of the report is how the rural health services have been affected by these reforms and the ways in which they are adapting to the new environment. Changes which the health service have had to endure have been found in economic, social and administrative environments. The main focus of the discussion is on strategies for replacing the cooperative medical schemes with a new generation of third party payers for rural health services. However it is clear that it will not be possible to address the problem of financing health services in isolation from other aspects of the rural health system. China led the world in the …