China is engaged in a major debate about the future of its health serv
ices. One reason for this is government's recognition that basic preve
ntive and curative health services are an essential component of an an
ti-poverty strategy. This article outlines the major issues a strategy
for re-establishing effective services in poor rural areas will have
to address. It argues that government will have to develop a systemati
c approach to reform, that takes into account the economic and institu
tional environment within which the health services function.