China's nearing the next tipping point on marketization: this time, in medical care

■"Chinese Doctors Tell Patients To Pay Upfront, or No Treatment: Parents of Boy With Leukemia Scramble for Cash to Cover New Chemotherapy Round; Threat Seen to Social Security.," by Andrew Browne, Wall Street Journal, 5 December 2005, p. A1.

As recently as the latte 1970s, before Deng started to marketize the economy, there was universal healthcare in China.

Now, about one-third enjoy health insurance, and the rest must pay as they go.

This cannot go on in a country experiencing the huge economic trajectory that China is experiencing now. It's just too inefficient, as their own economic think tanks are beginning to note. And it's just too politically dangerous, as the 4th generation of leaders under Hu and Wen are beginning to admit.

You just end up with too many heart-rendering stories. It's just too damaging to worker productivity.

So the next stage of China's marketization must come: privatizing insurance more and more. It's begun in life insurance and is moving quite rapidly there. Ditto for car insurance. It needs to begin in health insurance.

And therein lies the rub for the authoritarian government: each time it must work to avoid political unrest, the answer seems to be "more marketization," which in turn only decreases centralized control over the economy and thus the society, and thus fuels more bottom-up calls for pluralism to reflect the political realities of all that change.

Timing and sequencing are, of course, everything in this game, but the looming crisis in inescapable. Thus China will be forced to open up even further to attract the wherewithal from abroad to transform their outdated medical system of payments. And, in doing, so watch their government come under the same strains that our own faces on guns v. butter.