White Paper: China Basically Establishes Social Security System

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Last updated at: (Beijing Time) Monday, April 29, 2002

White Paper: China Basically Establishes Social Security System

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After years of exploration and practice, a social security system has been basically set up, consisting mainly of social insurance, social relief, social welfare, social mutual help and special care for disabled ex- servicemen and family members of revolutionary martyrs, and featuring the raising of funds through various channels and the gradual socialization of management and services, according to a white paper released Monday by the Information Office of the State Council.

The white paper said that since the early 1980s, the Chinese government has carried out a sequence of reforms in its social security system with the goal of establishing a standardized social security system independent of enterprises and institutions, funded from various channels, and with socialized management and services, a system characterized mainly by basic security, wide coverage, multiple levels and steady unification.

Under this mandatory state basic security, people's basic living needs will be met corresponding with China's economic development level, and the social security network will cover all citizens step by step. Besides basic security, the state will actively promote other types of social security so as to form a multi-level social security system. Through reform and development, a nationally unified social security system will be put into practice step by step.

Through more than a decade's efforts, basic social insurance policies have been formulated, and successively promulgated and implemented, covering the vast majority of urban staff and retirees, and in some regions even rural people working in cities are included. A social security system that guarantees urbanites a minimum standard of living has been established across China. In 2001, the Chinese government began a pilot program in Liaoning Province, aimed at improving the existing social security system in cities, according to the white paper.

The white paper said that since the mid-1990s, the Chinese government has undertaken reforms to the social security management system in order to bring all social security systems under unified planning, and better manage and supervise the use of social security funds. In addition, the Chinese government has adopted a large body of measures to increase the sources of social security funds.

It noted that since 1998, the Chinese government has adopted a "two guarantees" policy. The first is a guarantee of the basic livelihood of the laid-off personnel from state-owned enterprises. The second guarantee is to ensure basic livelihood for all retirees and that they receive basic pensions in full and on time.

To ensure the implementation of the "two guarantees," the Chinese government has put forth three corresponding policies. By 2001, the vast majority of people laid off by state-owned enterprises were receiving a basic living allowance, and retired personnel were receiving their pensions in full and on time.

The white paper said that the Old-Age Insurance System Reform of the old-age insurance system was initiated throughout China in 1984. In 1997, the Chinese government adopted a Decision on Establishing a Uniform Basic Old-Age Insurance System for Enterprise Employees. Employees participating in the old-age insurance program had increased from 86.71 million in late 1997 to 108.02 million by the end of 2001, after several years of implementation of the program. The number of those enjoying basic old-age pension had also increased from 25.33 million to 33.81 million. In 1991, China began to try out the old-age insurance system in some of the rural areas.

In 1988, the Chinese government began to reform the free medicare system in government institutions and the labor protection medicare system in state-owned enterprises. In 1998, the government issued the Decision on Establishing the Basic Medical Insurance System for Urban Employees. By the end of 2001, 97 percent of prefectures and cities had started such reform programs, and 76.29 million employees had participated in basic medical insurance programs.

The white paper said that the Chinese government began to set up an unemployment insurance system in 1986 to guarantee basic livelihood for laid-off employees. In recent years, the coverage of unemployment insurance has grown continuously, with the number of the insurance policy underwriters increasing from 79.28 million in 1998 to 103.55 million in 2001.

In the late 1980s, the Chinese government began its reform of insurance covering injuries suffered on the job. By the end of 2001, the national average rate of industrial injury insurance premium had been about 1 percent, with over 43.45 million employees covered by the industrial injury insurance scheme.

Reform of the childbirth insurance system started in some enterprises in China in 1988. By the end of 2001, the national average childbirth insurance expense rate had been 0.7 percent, with 34.55 million employees covered by the insurance scheme.

In 1993, the Chinese government began to reform the social relief system in cities, at the same time seeking to try out a minimum living standard security system. In 2001, there were 11. 707 million urban residents nationwide drawing the minimum living allowance, with 2.301 billion yuan for the minimum living allowance coming from the central finance. In recent years, part of the rural areas has started to set up a similar minimum living standard security system.

The white paper noted that to protect the rights and interests of people in extraordinarily straitened circumstances, the government has issued a series of laws and regulations. By the end of 2001, there had been 3,327 government-run social welfare institutions with 191,000 inmates. Meanwhile, special lotteries have been instituted to collect funds for social welfare undertakings.

The government has issued a number of regulations on special care and placement for disabled ex-servicemen and family members of revolutionary martyrs, now numbering more than 38 million. Special-care allowances to the tune of 29.2 billion yuan were allocated from state budgets at all levels from 1996 to 2001.

The white paper said that every year, relief funds are allocated from government budgets at central and local levels to relieve the sufferings of victims of natural calamities. From 1996 to 2001, such expenditures had reached 21.26 billion yuan-worth nationwide, providing food, clothing and quilts for 390 million disaster victims.

Mutual help among neighbors is one of the Chinese nation's fine traditions. Issued in 2000, the Law of the People's Republic of China on Public Welfare Donations institutionalizes and encourages regular donations for social welfare, according to the white paper.

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