Healthcare reform will counter the financial crisis by pumping money into local businesses and boosting consumption, experts say.

Ge Yanfeng, director at the Development Research Center affiliated¹ to the State Council, said infrastructure² projects will be awarded to businesses and help drive economic growth.

In addition, the new medical insurance system will allow households to spend money previously³ set aside to cover medical bills.

He also said it will give many people a better quality of life and this in turn could lead to increased consumption.

"The healthcare reform will provide a motive⁴ for China's economic growth," Ge told the Xinhua News Agency.

Li Yingpeng, analyst⁵ with China Galaxy⁶ Securities Company Limited, said the government needed an additional 50 to 60 billion yuan to fund its promise to increase the annual medical insurance subsidy⁷. It will be increased from 80 to 120 yuan per person by 2010.

It also needed to raise billions of yuan to finance plans for increased reimbursement⁸ of hospital costs.

However, both plans will help remove insecurities about the health system and could lead people to spend more money in the domestic economy, said Zhao Xijun, a finance professor from the Renmin University of China.

Li Ling, professor with Peking University, said plans to supply public hospitals and clinics with essential drugs at government-regulated prices will reshuffle the pharmaceutical⁹ industry.

According to official statistics, the healthcare budget this year is 341.6 billion yuan, an increase of 36.68 percent from the previous year.