The objectives of this stuey are to describe thetrends of government health budget in three provinces(Shanxi, Jiangsu, and Guizhou provinces) of China, toevaluate the allocative efficiency between curative andpreventive budget, and the equity of public healthbudget among 5 counties in the three provinces during1985-1993. The study analyzed data from a special survey whichwas conducted by Chinese Academy of Preventive Medicinein 1994. Results show that : in the three provinces, theproportion of government health expenditure to GCP hasdecreased

the ratio of government recurrent budget forhealth to total government expenditure also has adecreasing trend

especially for the preventive sector,the proportion of budget to GCP decreased dramatically.They indicates that government gradually paid lessattention to the preventive health sector. A model was established to evaluate the allocativeefficiency between preventive and curative budgetbefore and after the economic reform in 1989. Themarginal effect of perventive and curative budget wereestimated. Results show that, before the economicreform, the marginal effect of preventive budget wassmaller than that of the curative one. But after theeconomic reform, the curative budget marginal effectwas only 60% of preventive one. It indicates thatbefore economic reform government allocated too muchbudget to the preventive sector. But after the reform,local government over allocated budget to the curativesector. Gini coefficient was used to evaluate the equityof preventive and curative budget among the 5 countiesduring the 9 years. Results show that, poorer countiesgot more preventive budget than richer counties, whilericher counties got more curative budget than poorercounties form local government. The equity of both typeof budget decreased after the economic reform due todecentralization.