Declining access to health care and rapidly rising health expenditures are a matter of grave public concern in China. After decades of efforts to reduce its involvement, the Chinese government is currently in the process of reforming the sector through increase in public expenditures and expansion of health insurance. The objective of this paper is to assess the potential of the reform direction in light of international experiences with similar reforms. It argues--on the basis of examination of reform experiences in Korea, Singapore and Thailand--that financing reforms without parallel measures to improve the provision system, especially how providers are paid, are unlikely to address the problems and may actually aggravate them. If the financing reforms are to succeed, it is vital for China to reform the incentives that guide the providers' behaviour.