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Background To effectively provide public health care for rural residents, the Ministry of Health formally unveiled the contract service policy in rural China in April 2013. As the counterpart to family medicine in some developed countries, the contract service established a compact between village doctors and local governments and a service agreement between doctors and their patients. This study is a rare attempt to explore the perspectives of health providers on the contract service policy, and investigate the demand side’s attitude toward the public health services delivered under the contract policy. This evidence from Xinjian County, Jiangxi Province, the first and most representative pilot site of the contract service, could serve as a reference for policymakers to understand the initial effects of the policy, whereby they can regulate and amend some items before extending it to the whole country. Methods Official documents were collected and semi-structured interviews with human resources and villagers in Xinjian County were conducted in September 2013. A purposive sampling method was used, and eight towns from the total 18 towns in Xinjian County were selected. Ultimately, eight managers (one in each township health center), 20 village doctors from eight clinics, and 11 villagers were interviewed. A thematic approach was used to analyze the data, which reflected the people’s experiences brought about by the implementation of the contract service policy. Results While the contract service actually promoted the supply side to provide more public health services to the villagers and contracted patients felt satisfied with the doctor-patient relationship, most health providers complained about the heavy workload, insufficient remuneration, staff shortage, lack of official identity and ineffective performance appraisal, in addition to contempt from some villagers and supervisors after the implementation of the contract service. Conclusions Contract service is a crucial step for the government to promote public health services in rural areas. To inspire the positive perspective and optimal work performance of the health workforce, it is imperative for the Chinese government to fortify financial support to health providers, adopt an advanced management model and escalate administrative capacity.