BEIJING — China announced that it intended to spend $123 billion by 2011 to establish universal health care for the country's 1.3 billion people.

The plan was passed Wednesday at a session of the State Council, the Chinese cabinet. Prime Minister Wen Jiabao presided.

Xinhua, the state news agency, said the authorities would "take measures within three years to provide basic medical security to all Chinese in urban and rural areas, improve the quality of medical services and make medical services more accessible and affordable for ordinary people."

Providing universal health care is seen by some economists as a way to stimulate domestic spending during the current economic downturn. The Chinese have a high savings rate, and one of the reasons usually cited is their concern about possible medical expenses.