Chinese Premier on Social Security System

Premier Zhu Rongji said in Beijing today that the establishment and development of a social security system has an overall impact on reform, development and stability, stressing that it is an endeavor of great significance which requires most diligent efforts to ensure its success.

Addressing the opening meeting of the Third Session of the Ninth NPC, Premier Zhu said that on the basis of the guarantee of basic cost of living allowances for workers laid off from state-owned enterprises and subsistence allowances for urban residents, China is to advance reforms to gradually form a social security system with Chinese characteristics, which is independent of the employer, has diversified funding sources and has management and services not provided by the employer.

The premier noted that the operation of re-employment centers for state-owned enterprises must be further improved. These centers should pay basic living expenses to laid-off workers on schedule and in full and pay the premiums for the social welfare insurance of these workers, including old-age, unemployment and medical insurance.

Allocations from the central government budget will continue to support the central and western regions and old industrial bases whose financial problems are truly serious, he said. Local authorities should help these workers change their ideas about what kind of job they are seeking, work hard to create jobs, develop vocational training programs for laid-off workers, and help more of them find new jobs as soon as possible. Governments at all levels and concerned departments should cooperate whole-heartedly in strengthening supervision and inspection to ensure the full implementation of the various policies concerning re-employment. Whenever possible, enterprises should be encouraged and advised to separate their main and secondary business activities, find other positions for their redundant workers within the enterprise, and set up new economic entities with independent accounting and responsibility for profits and losses to absorb redundant workers. On gradually forming a social security system with Chinese characteristics, Zhu said that first the coverage of social welfare insurance programs should be expanded in accordance with law, and the insurance premium collection rate raised. Social welfare insurance, particularly old-age, unemployment and medical insurance, must be made mandatory in urban areas. Various measures should be adopted to open up new funding channels to supplement social security funds, he added. Second, he noted, China should improve the unemployment insurance system and speed up the development of labor market. The current practice of enterprise re-employment centers guaranteeing the basic cost of living allowances to laid-off workers should be changed to laid-off workers receiving unemployment insurance benefits and looking for jobs in the labor market. Third, non-employer management of old-age insurance programs should be promoted to gradually shift responsibility for retirees from their former employers to society at large and effect non- employer payment of old-age pensions as soon as possible. "We should conduct trials of community-administrated programs for retirees. We should exercise more effective leadership and management of communities and improve their function as service providers," he said.

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