China needs to better regulation social insurance funds, says director

Inadequate laws, insufficient transparency and inadequate public accountability have led to widespread embezzlement of social insurance funds, says Meng Zhaoxi, director of the social insurance management center of the Ministry of Labor and Social Security.

Meng says new regulations are needed to standardize the collection, management, payment and operation of social insurance funds.

Meng said China should improve the legal system to strengthen

supervision and eliminate the misuse of the funds.

China's social security system is funded from revenues from huge, multi-billion yuan insurance funds that provide pensions, unemployment and medical insurance, worker injury compensation, and maternity leave.

China's National Audit Office discovered 7.1 billion yuan (816 million U.S. dollars) in illegally used social security funds in 2006. The funds were either illegally borrowed, used or deposited.

The highest-profile case involved Chen Liangyu, the Party Secretary of Shanghai, who is accused of misappropriating three billion yuan.

Source: Xinhua