After three decades of great improvements in China's health status, health gains have eroded recently. The three main causes of this have been changes in government financing of the health sector, the shift to a more market-oriented economy, and a shift toward more noncommunicable diseases and injuries, the prevention of which has not been a traditional part of China's public health programs.Over the past three decades, China has made commendable strides in improving the health status of its population. Between 1965 and 1995, its infant mortality rate declined from 90 per 1,000 live births to 36. During the same period, life expectancy at birth rose from 55 to 69 years and the maternal mortality rate fell from 26 to 15 per 100,000 deliveries.This performance compares favorably with that in similar Asian economies. China's infant mortality rate, for example, was less than half the rate predicted for its income level. Similarly, life expectancy at birth was higher than that in many comparable Asian countries.These favorable results conceal more recent trends, however. Since the early 1990s, mortality rates have increased in many provinces, particularly among infants and children under age five. And health status and health-related process indicators have improved more slowly than in the mid-1980s.What accounts for relatively stagnant, even deteriorating health indicators, and what strategies should be designed to address them as China enters the 21st century? Overall, Hossain argues, the recent erosion in health gains stems from three factors:- Changes in government financing of the health sector have increased inequity, inefficiencies, and costs for medical treatment.- The main contributors to the burden of disease have shifted from maternal conditions and infectious diseases toward noncommunicable diseases and injuries, the prevention of which has not been a traditional part of China's public health programs.- The shift to a more market-oriented economy has changed environmental and behavioral risk factors, thus diversifying the types of disease across regions.Hossain suggests strategies for mitigating China's current and emerging health problems.This paper - a product of the Rural and Social Development Division, China and Mongolia Department - is an earlier version of chapter 2 of World Bank, China: Social Sector Expenditure Review, 1996, China and Mongolia Department, Washington, DC, 1996