China will tighten controls on its two-trillion-yuan social security fund to keep greedy hands at bay.

The Shanghai scandal, which involved 3.2 billion yuan (400 million U.S. dollars) of city funds and brought down Chen Liangyu, secretary of the Shanghai Municipal Committee of the Communist Party of China (CPC), has put the national social security cushion under the microscope.

China has carried out five nationwide audits of social security funds since 1998, revealing embezzlement in 16 of the 31 provinces, autonomous regions and municipalities on the mainland in 2004 and 1.7 billion yuan misappropriated in 2005.

Chen Liang, a senior official with the Ministry of Labor and Social Security (MLSS), said inadequate laws, insufficient transparency in fund management and inadequate public supervision are all factors in widespread embezzlement.

Fewer than 100 people supervise social security funds nationwide and records are written out by hand rather than stored on computer in some local areas.

"We must first ensure the security of the funds and then try to earn money with them," said MLSS minister Tian Chengping.

The State Council, the country's cabinet, said on Wednesday that misappropriated funds must be paid back in full within strict time limits and officials involved should be punished.

The MLSS said the management regulations on social security funds have already been addressed to lawmakers.

The social security framework includes five main insurance programs: pensions, unemployment, medical care, work injuries, and pre-natal and post-natal care for women workers.

By the end of 2005, China's social security funds totaled 1.84 trillion yuan (233.35 billion U.S. dollars).

Twenty-seven provinces, autonomous regions and municipalities have established social security supervision committees consisting of government officials, business people and experts and the other four plan to set up committees in the near future.

Source: Xinhua