This article, written by Zhang Zuoji, minister of Labor and Social Security, on what he has gained from the study of the Decision of the Fourth Plenary Session, reads in full as follows:

The Decision of the CPC Central Committee on Some Major Issues Concerning the Reform and Development of State-Owned Enterprises adopted by the Fourth Plenary Session of the 15th Central Committee of the Communist Party of China CPC), which sets forth explicit requirements for doing well the work of downsizing staff and increasing efficiency and re-employment, and accelerating construction of a perfect social security system, is an action program for guiding us to do a better job in the labor and social security work.

I. Earnestly Guaranteeing the Basic Living Standards of SOEs' Laid-Off Workers

For a long time in the past, redundant personnel have constituted an outstanding problem hindering the reform and development of State-owned enterprises (SOEs). Laying off and diverting redundant workers, as well as downsizing staff and increasing efficiency, is an important content and condition for the SOE reform and is one of the key factors for achieving the target of the reform of SOEs and helping them get rid of difficulties in three years.

--Adhering to the principle of downsizing staff and increasing efficiency and doing the work of laying off and diverting redundant personnel, standardizing the procedures for laying off workers, conscientiously and properly running enterprise re-employment service centers, organizing qualified layoffs to come to the service center, guaranteeing their basic livelihood and paying various social insurance expenses for them. Qualified SOEs should be encouraged to introduce the separation of primary from secondary trade, transferring and diverting redundant workers, arranging proper jobs for enterprise surplus personnel and reducing social employment pressure. With regard to large and medium-sized SOEs listed for achieving the objective of getting rid of difficulties in three years, it is necessary to intensify efforts of laying off and diverting redundant workers and really create conditions for enterprises to get out of difficulties and carry out institutional reform. As we make an overall consideration, we should, on the basis of laying off and diverting redundant personnel at the earlier stage, strive to basically solve the problem of redundant personnel by the end of next year, a problem left over from the planned economic system, and to attain the aim of reducing enterprise production cost and increasing benefit and efficiency.

--Funds should be put in place by conscientiously following the principle of the "three-three system" (one-third of workers are assigned to engage in the primary trade, one-third in the secondary industry and another one-third in the development of agriculture and animal husbandry). The collection of funds is a key link in doing a good job in guaranteeing the basic living standards of SOEs' laid-off workers. Funds should be ensured by persistently following the method of letting enterprises, society and financial departments undertake their respective responsibilities. First, we should ensure that enterprises raise funds by themselves, enterprises with better financial resources must contribute money which they should. Second, we should intensify efforts for the collection of funds from society and put in great efforts for doing a good job in the levying of unemployment insurance expenses; while guaranteeing the payment of unemployment insurance expenses, we should allocate more funds to be used to guarantee the basic livelihood of laid-off workers. Third, In compliance with the requirements of the central government, financial departments at all levels should intensify efforts in adjusting the outlay structure and make sure that funds for guaranteeing basic livelihood should be first arranged in full amount. Old industrial bases, trades and enterprises with difficulties should, through support from central and local financial departments, guarantee the basic livelihood of laid-off workers.

--Doing a good job in the mutual connection among the three guaranteeing lines (the security system for the basic livelihood of laid-off workers, the unemployment insurance system, and the security system for the minimum living standards of urban residents). For layoffs whose prescribed period in the re-employment service center has expired but who have not yet been re-employed, their labor relations with the original enterprise should be terminated according to regulations, those meeting the required conditions may register with the local unemployment insurance institutions and then be given the unemployment insurance treatment. Laid-off workers and unemployed personnel whose families have financial difficulties may enjoy the treatment of a minimum secured life for urban residents. The three guaranteeing lines connect and complement each other, forming the current social security system with Chinese characteristics.

II. Actively Expediting the Re-employment of Laid-Off Workers

To do a good job relating to SOEs' laid-off workers and safeguard their vital interests, the most important thing is to help them realize re-employment.

--Opening up extensive employment avenues and increasing work posts. At present and for a period to come, the oversupply of labor force will be a very sharp contradiction, it is therefore essential to open up new employment avenues through multiple channels. First, maintaining the steady growth of the State-owned economy. The fundamental way out for expanding employment lies in economic development. When the central government made the decision to increase investment in the construction of basic industries and infrastructure facilities, readjust the income distribution policy, expand domestic demands in order to boost economic growth, one important consideration was to solve the employment problem. Second, actively adjusting and improving the structure of ownership and developing small and medium-sized enterprises which allow the coexistence of multiple economic forms. At present, the non-publicly owned economy has become an important channel for providing jobs, small and medium-sized enterprises are the main channel for employment. Among the new employment, around 80 percent are provided by small and medium-sized enterprises which have great potential for employment. Third, actively readjusting the industrial structure, vigorously developing the tertiary industries, particularly the community service trades. Fourth, encouraging flexible and diverse employment forms, such as non-full-time workers, seasonal workers, short-term workers, temporary workers and time-workers. Fifth, carrying out the preferential policy for re-employment and encouraging self-employment. Both central and local governments have formulated a series of preferential policies for promoting the re-employment of laid-off workers, with regard to self-employed personnel, they are given support in the aspects of industrial and commercial registration, tax reduction or exemption and financial credit, making sure that these preferential policies are carried out among laid-off workers.

--Strengthening re-employment training and changing employment conception. Multi-form and multi-level employment training should be carried out purposefully to enhance the re-employment abilities of laid-off workers. Beginning from this year, a labor reserve system will be instituted everywhere in cities and towns, while improving the qualities of laborers, efforts should be made to alleviate employment pressure. Laid-off workers should be guided to cast off all traditional job-choosing concepts and establish the concept of a market-oriented independent choice of jobs and improve themselves to start an undertaking. The employing units should also change their concept of choosing right personnel, various social sectors should also understand and respect laid-off workers.

--Accelerating labor market construction, gradually establishing market-oriented employment mechanisms. Speeding up and pushing forward labor market construction, further improving the unemployment insurance system and forming market employment mechanisms for the rational flow of labor force. Realizing scientific, standardized and modernized labor markets and providing employment guidance and information service for laid-off workers. At the same time, rectifying and standardizing the labor market order, and protecting the legitimate rights and interests of job-seekers according to law. On this basis, guiding and urging laid-off workers to enter the market in accordance with the time and the place, and gradually forming a new mechanism for enterprise redundant personnel to realize employment directly through the labor market.

III. Speeding Up the Establishment and Perfection of the Social Security System

Accelerating reform of old-age, medical and unemployment and other social insurance systems, forming a relatively complete social security system independent of the enterprise, guaranteeing the basic livelihood of SOEs' laid-off workers, guaranteeing the timely issuance of the full amount of pensions for enterprise retirees, ensuring the basic medical treatment of workers and promoting SOE reform and social stability.

--Expanding the social insurance coverage scope, and strengthening the levying of social insurance funds. Intensifying efforts to implement the Interim Regulations on the Levying of Social Insurance Expenses and the Regulation on Unemployment Insurance, Units and workers who should participate in social insurance according to law should all be involved in the social fund-raising program, doing a good job in drawing collective and private enterprises into participating in old-age insurance, as well as institutions into taking part in unemployment insurance. At the same time, strengthening the levying and clearing of social insurance expenses. Resolute punishment should be meted out according to the stipulation of the Regulations to the acts of employing units which refuse to participate in social insurance and pay social insurance premium.

--Actively and steadily pushing forward reform of the medical insurance system. The medical insurance system is an important component of the social insurance system, it is, therefore, necessary to speed up the pace of reform. Currently, the focus of work is to guide various localities to formulate medical insurance implementing plans and continually organize their implementation, and fulfill the task of establishing a basic medical insurance system for urban workers as quickly as possible.

--Widening social security fund-raising channels, and strengthening social insurance fund management. Due to the steady increase in the deficiency of social insurance funds, financial departments at all levels, particularly the central level, have, in the past two years, intensified efforts to increase financial support. It is highly necessary for the Decision to set forth measures to replenish social security funds through levying interest tax, turning part of State-owned assets into cash and rationally readjusting the financial revenue and expenditure structure. It is necessary to act earnestly in accordance with the requirements of the Decision, strive to expand new and stable fund-raising channels for social security. While strengthening the levying of funds and working hard to explore new sources and channels of funds, we should strictly manage various social insurance funds, rigorously forbid the misappropriation of funds and guarantee the safety and added value of the funds.

--Accelerating the socialized issuance of old-age pensions and pushing forward socialized management of social security. Socialized management service is an important target for the establishment of a social security system, as well as an important condition for the establishment of a modern enterprise system. Great efforts should be made to promote the payment, allocation and socialized issuance of full amount of old-age pension. Pensions should be issued through the bank, the post office and other social service institutions. On this basis, retirees should be gradually separated from the original enterprise, related affairs shall be placed under the community management in accordance with the principle of dependency.

IV. Establishing an Income Distribution System Suited to the Modern Enterprise System

V. An income distribution system suited to the modern enterprise system should be gradually set up by adhering to the principle of taking distribution according to work done and allowing the coexistence of multiple distribution methods and in line with the general idea of "market mechanism regulation, enterprise's independent distribution, workers' democratic participation, and the State's supervision, control and guidance". Under the guidance of national policies, the wage level of SOE workers should be determined by the enterprise in light of the average wage level of local society and the economic benefits of the enterprise, which can be increased or decreased. It is necessary to establish and perfect incentive and restrained mechanisms for SOE managers, and actively and steadily push forward an operator's annual salary system. In enterprises' internal distribution, it is necessary to apply the principle of distribution according to work done, salary is fixed according to work post and changed with the shift of work posts. Active efforts should be made to explore methods by which capital, technology and other production elements participate in income distribution, strengthen and perfect supervision mechanisms and enhance the transparency of the wage income distribution.

We believe that under the correct leadership of the Party Central Committee and the State Council, and with the concern and support extended by the broad masses of workers and various social circles, we can definitely fulfill the various tasks related to labor security work entrusted to us by the central authorities, and make contribution to the reform and development of SOEs and to social stability.