By John Wong, Lai Hongyi

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During this period of time, the successor has to pass a number of tough tests: how to handle the relations with his mentors properly, whether he is capable of working with his colleagues as the number one boss, what kind of personal network he has to construct — not too conspicuous but with a clear factional structure. The uneven distribution of factional interest in the l6th PSC may slow Hu's own effort of power consolidation and will certainly affect his running of the CMC. 9 No matter what purpose it is for Jiang and Hu to take advantage of the trend of institutionalizing power in the CCP, they have good reasons to do so and this exerts profound impact on China's political development.

A commander-in-chief without any civilian portfolio is indicative of an abnormal civil-military relationship. That Jiang finally stepped down within a two-year framework demonstrated some real progress in the rectification of this situation. However, the "perceived need" for him to stay on after the 16th Congress also vividly showed that political succession was still an unresolved problem in China's domestic politics. Deng set the precedent to retain the CMC chair as a way to tackle the uncertainties in the postsuccession period (after his giving up the civilian positions).

Enrollments in the program have been growing rapidly in recent years, with membership in 2003 exceeding 100 million, constituting more than 36% of urban employees. In rural areas, the central government wants to encourage a Cooperative Medical System (CMS), a rural equivalent of urban social insurance, but has made much less progress. Blomqvist argues that since the health care sector is prone to market failure, the Chinese belief that free markets could work well for the health care system is flawed.

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