Chinese government reassesses social security tasks

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Last updated at: (Beijing Time) Thursday, November 20, 2003

Chinese government reassesses social security tasks

China's central government plans to extend pension insurance to all urban workers and is encouraging efforts to establish a pension system for the country's 900 million rural residents.

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China's central government plans to extend pension insurance to all urban workers and is encouraging efforts to establish a pension system for the country's 900 million rural residents.

A decision passed by the Third Plenary Session of the 16th Central Committee of the Communist Party of China (CPC) in October set new goals for China's social security system which would result in great benefits, said Liu Yongfu, vice minister of labor and social security.

Liu made the remarks at a recent symposium on "the socialist market economic system and China's social security".

Hu Xiaoyi, an official with the Ministry of Labor and Social Security said the decision accepted for first time all urban workers into the pension insurance scheme, whereas previously coverage had been confined to employees of publicly owned enterprises.

"It's a new idea, and also a new task for us," Hu said.

The decision also demanded the establishment of province-based planning for pension insurance funding and promoted the idea of establishing nationwide basic funding if conditions permitted.

The new request for more advanced levels of general planning would impose new challenges on China's social security work, experts said.

Jia Kang, head of the financial science research institute under the Ministry of Finance said China was encouraging a more flexible employment system as small and medium sized enterprises were employing more staff and the ranks of the self employed were also growing.

As a result, increasing numbers of migrant rural laborers, employees of smaller companies and freelancers had surfaced to pose fresh new tasks for the social security system.

"However, China's current planning for social security funding, either at county level or city level, discourages the diversion of the pension fund from one place to another as laborers migrate," he said.

While the current social security system does not cover China's900 million rural population, the decision proposed that rural areas base the pension insurance system on households, with aid from the community or state. It also encouraged regions with stronger economic conditions to explore mechanisms pledging a minimum standard of living for rural residents.

Other breakthroughs in the decision included requests for maintaining the insurance through pregnancy and while recuperating from injuries suffered on the job.

The decision also explored the option of assigning part of state-owned assets to supporting social security funding.

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