The sustainability of fiscal subsidies in China’s long-term care insurance pilots

Ren, Tong (2026). The sustainability of fiscal subsidies in China’s long-term care insurance pilots. University of Birmingham. Ph.D.

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Abstract

With the acceleration of population ageing, long-term care (LTC) has become a pressing policy challenge. In China, the long-term care insurance (LTCI) pilot programme, launched in 2016 and expanded in 2020 to 49 cities across 29 provinces, represents a major institutional innovation in the social security system. Drawing on policy diffusion theory and the perspective of central-local government relations (央地关系视角), this thesis examines the institutional evolution and fiscal sustainability of China’s LTCI pilots.

A structured comparative policy review of the two pilot phases (2016 and 2020) across financing mechanism, benefit design, disability assessment, and public-private partnerships (PPPs) reveals a transition from fragmented local experimentation to emerging standardisation. Key shifts include diversification of funding, expansion of benefits, unification of disability assessments, and refinement of PPP models, though persistent challenges remain, such as regional disparities, fiscal strain, and limited awareness.

For fiscal sustainability, the thesis combines the GM (1,1) grey forecasting model and cell-based aggregate projection models. Demographic and economic indicators are incorporated, and the ratio of subsidies to general public budget revenue (GPBR) is designed as the core measure of fiscal pressure. Simulations of fixed-sum, proportional, and mixed subsidy policies at municipal, provincial, and national levels highlight marked differences in fiscal viability, showing that sustainability depends critically on local fiscal capacity, subsidy design, and central-local redistribution.

The thesis makes three main contributions: (1) it maps institutional evolution across two pilot phases, demonstrating how central directives and local experimentation co-shaped LTCI development; (2) it pioneers a multi-level quantitative assessment of fiscal sustainability under alternative subsidy schemes; and (3) it offers integrated policy strategies, such as independent legislation, diversified financing, service integration, and digital governance, to enhance long-term equity, efficiency, and sustainability.

In sum, while LTCI pilots have eased unpaid family care pressures and provided valuable institutional experience, their long-term viability will require stronger fiscal frameworks and coordinated multi-actor governance.

Type of Work:

Thesis (Doctorates > Ph.D.)

Award Type:

Doctorates > Ph.D.

Supervisor(s):