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Contents
Foreword
I Old-Age Insurance
II Unemployment Insurance
III Medical Insurance
IV Insurance for Work-related Injuries
V Maternity Insurance
VI Social Welfare
VII Special Care and Placement
VIII Social Relief
IX Housing Security
X Social Security in Rural Areas
Conclusion
Foreword
Social security is one of the most
important socio-economic systems for a country in modern times. To establish and
improve a social security system corresponding to the level of economic
development is a logical requirement for coordinated economic and social
development. It is also an important guarantee for the social stability and the
long-term political stability of a country.
China is the biggest developing
country with a large populationin the world, and its economic base is weak and
the development between regions and between town and country is unbalanced.
Establishing a sound social security system in China is an extremely arduous
task.
In light of China's actual
situation and adhering to the principle of "putting people first," the Chinese
Government attaches great importance and devotes every effort to establishingand
improving its social security system. The Constitution of the People's Republic
of China stipulates that the state shall establish and improve a social security
system corresponding to the level of economic development. The Chinese
Government regards economic development as the basic prerequisite for improving
people's livelihood and effecting social security.
For a long time before 1978, when
China adopted the reform and opening-up policies, China had practiced a social
security policy corresponding to its planned economic system, providing social
security services to its people as best it could. Since China established and
improved its socialist market economy system in the mid-1980s a series of
reforms have been introduced to change the old social security system practiced
under the planned economy,and a basic framework of a social security system has
been set up in China corresponding to the market economy system, with the
central and local governments sharing specific responsibilities.
China's social security system
includes social insurance, social welfare, the special care and placement
system, social relief and housing services. As the core of the social security
system, social insurance includes old-age insurance, unemployment insurance,
medical insurance, work-related injury insurance and maternity insurance.
I. Old-Age Insurance
China is now an aging society. As
the aging of the population quickens, the number of elderly people is becoming
very large. This trend will reach its peak in the 2030s. To guarantee the basic
living standards of the elderly and safeguard their legitimate rights and
interests, the Chinese Government has continuously improved the old-age
insurance system and reformed the fund-raising mode in an attempt to establish a
multi-level old-age insurance system marked by sustainable development.
Promoting the Development of a Basic Old-Age Insurance System for Employees in
Urban Areas
-- Reforming the basic old-age
insurance system for enterprise employees in urban areas. In 1997, the Chinese
Government unified the basic old-age insurance system for enterprise employees
in urban areas across the country by implementing a
social-pool-plus-personal-accounts scheme. Enterprise employees who have reached
retirement age as provided by law (60 for male employees, 55 for female cadres
and 50 for female workers) and who have paid their share of the premiums for 15
years or more shall be entitled to collect a basic old-age pension every month
after retirement. The basic old-age pension consists of two parts: base pension
and pension from personal account. The monthly sum of the base pensionis
tantamount to about 20 percent of an employee's average monthlywage in that area
in the previous year. The monthly pension sum from the personal account is 1/120
of the total accumulated sum inthe personal account (11 percent of an employee's
wage being deposited every month in the pension section). The state adjusts the
level of the basic old-age pension with reference to the priceindex of living
expenses for urban residents and employees' pay increases. In 2003, the monthly
basic pension for enterprise retirees covered by the basic old-age insurance
scheme was 621 yuan on average.
-- Expanding the coverage of basic
old-age insurance. Initially,China's basic old-age insurance covered only
state-owned enterprises and collectively-owned enterprises in urban areas and
their employees. In 1999, this coverage was expanded to include foreign-invested
enterprises, private enterprises and other types of enterprises in urban areas,
as well as their employees. All provinces, autonomous regions and municipalities
directly under the Central Government can make provisions to include persons
engaged in individual businesses of industry or commerce in the basic old-age
insurance in accordance with the specific conditionsin their localities. In 2002
China expanded its basic old-age insurance coverage to all those who were
employed in a flexible manner in urban areas. In 2003, the number of people
participatingin the basic old-age insurance scheme across China reached 155.06
million, 116.46 million of whom were employees.
-- Undertaking experimental reforms
in selected areas to improve the basic old-age insurance system. In 2001, the
Chinese Government began to carry out pilot projects along this line. The reform
includes: gradually establishing personal accounts so that funds can be
accumulated, and probing ways of preserving and increasing the value of the
funds; changing the way the base pension is calculated and paid, whereby the
amount of base pensionis more closely linked to the length of time of the
employee's premium payment, and if an employee has participated in the basic
old-age insurance program and paid the premiums for 15 years, he or she will be
entitled to a higher rate of pension for every additional year of payment;
unifying the procedures of premium payment by those who are employed in a
flexible manner, whereby the base of their premium payment is uniformly set at
20 percent of the average wage of local employees. The pilot project was first
conducted in Liaoning Province, and has been expanded to Jilin and Heilongjiang
provinces in 2004.
-- Probing the reform of the retirement system of government
agencies and public institutions. In China the retirement and pension system in
government agencies and public institutions is different from that applied in
enterprises. In 2003, there were 670,000 retirees who had joined the
revolutionary ranks before October 1949 and 9,310,000 other retirees from these
agencies and institutions. In the 1990s, some localities in China began to probe
the procedures of reforming the retirement system in such agencies and
institutions. Pilot projects were conducted to raise the retirement pension
funds through the social pool program. By the end of 2003, some 11.99 million
employees and 2.58 million retirees had participated in such pilot projects.
Raising Funds for Basic Old-Age
Insurance Through Multiple Channels
As the aging of the population
quickens and the number of retirees increases steadily, the pressure on the
payment of funds for basic old-age insurance is becoming ever greater. In order
to make sure that basic pensions are paid in full and on time, the Chinese
Government is raising such funds through multiple channels.
-- Practicing joint premium
payment by both enterprises and employees. Generally the premiums paid by
enterprises will not exceed 20 percent of the total wage bill of the enterprise,
with the specific proportion being determined by the people's governments of
provinces, autonomous regions and municipalities directly under the Central
Government. Individual employees pay eight percent of their wages as premiums,
whereas self-employed individuals and those who are employed in a flexible
manner in urban areas pay an amount equal to about 18 percent of the averagewage
in their locality. In 2003, the basic old-age insurance premium paid by
enterprises nationwide totaled 259.5 billion yuan.
-- Increasing the subsidy outlay
from the government financial budget for basic old-age insurance funds. The
state has called upon governments at all levels to increase the momentum of
restructuring their financial expenditure and raise their input into social
security. In 2003, state budgets at all levels contributed 54.4 billion yuan
toward basic old-age insurance funds,of which 47.4 billion yuan came from the
central budget.
-- Establishing a national social
security fund. In 2000, the Chinese Government decided to create a national
social security fund. Its sources include: funds acquired from reducing state
shareholding, stock ownership assets, funds from the central budget, funds
raised by other means approved by the State Council,and investment returns. The
national social security fund is administered by the National Social Security
Fund Executive Council, and is operated on market principles in accordance with
the procedures and requirements prescribed by the "Interim Measures for the
Management of the Investment of the National Social Security Fund." The national
social security fund provides an important financial reserve for the
implementation of old-age insurance and other social security programs. By the
end of 2003, it had accumulated over 130 billion yuan.
Promoting the Socialization of
Management and Services for Old-Age Insurance
In the past, Chinese enterprises
were responsible for both the issuance of basic pensions to their own retirees
and the administration of those retirees. Now, to ensure that all
retireesreceive their basic pensions in full and on time, and lessen the burden
of social affairs on enterprises, the government is actively practicing the
delivery of basic pensions by social service institutions. At the end of 2003,
the basic pensions of retirees from enterprises were all delivered by social
service institutions, and 84.5 percent of those retirees were under the
administration of such institutions.
In 2003, the Chinese Government began
to implement an information-based labor security project, or popularly called
"golden social security project," in order to raise the overall management level
of social insurance and to meet the needs of the floating labor force to
continue with their social insurance coverage once they change jobs. The goal of
the project is to realize computer-based networking of social security
information across the country. So far the networking of old-age insurance
information between the Central Government and the provinces has been initially
effected.
Establishing a Multi-Level Old-Age Insurance System
In recent years, the Chinese
Government has made great efforts to build a multi-level old-age insurance
system. In addition to participating in the compulsory basic old-age insurance,
enterprises with suitable conditions may set up annuities for their employees.
Both enterprises and individuals will contribute to this annuity, which will be
accumulated wholly for that specific purpose and managed in the form of personal
accounts. Theenterprise annuity funds will be managed and operated in accordance
with the market mechanism. In 2003, nearly seven million people participated in
the enterprise annuity program. In addition, the state also encourages personal
savings for old age.
The first two decades of the 21st
century will be a critical period in the development of China's old-age
insurance. The state will further improve the basic old-age insurance system
that combines social pool and personal accounts, and gradually consolidate the
latter. Basic old-age insurance will extend to cover all eligible employees in
urban areas, and at the provinciallevel the establishment and improvement of
regulating funds for old-age insurance will be carried out. Social pool at the
city level shall be improved and gradually raised to that at the provincial
level.
II. Unemployment Insurance
While promoting the reform of the
enterprise employment system and setting up a market-oriented employment
mechanism, the ChineseGovernment is speeding up the development and improvement
of an unemployment insurance system to guarantee the basic livelihood
ofemployees after they lose their jobs, to help them find new jobs, and
accelerate the combination of the basic livelihood guarantee system for people
laid off from state-owned enterprises with the unemployment insurance. By the
end of 2003 there were 103.73 million people who participated in the
unemployment insurance scheme, which provided unemployment insurance benefits of
varying time limits to 7.42 million laid-off employees throughout the year.
Standardizing and Improving the
Unemployment Insurance System
In 1999, the Chinese Government
issued the "Regulations on Unemployment Insurance," which effectively
standardized and improved the unemployment insurance system.
-- Range of participation and
premium payment. All enterprises and institutions in urban areas and their
employees must participate in the unemployment insurance program, under which
employers pay two percent of their total wage bill and individualspay one
percent of their personal wages as unemployment insurance premiums. When the
unemployment insurance funds in areas that haveparticipated in the social pool
program are not enough, the shortfall shall be made up by unemployment insurance
regulating funds or subsidized by local financial budgets.
-- Qualifying conditions for
unemployment insurance. Laid-off persons must meet three requirements to qualify
for unemployment insurance: having paid unemployment insurance premiums for at
least one year; not having terminated their employment voluntarily;having
registered as unemployed and being willing to be re-employed.
-- Rate of unemployment insurance
allowance. The people's governments of provinces, autonomous regions and
municipalities directly under the Central Government determine the unemployment
insurance allowance in their own localities, which shall be lower than the
minimum wage in their localities but higher than the minimum living allowance
for urban residents. Provisions regardingthe time limit during which one
receives the benefits are as follows: An unemployed person whose former employer
and himself orherself have continually paid unemployment insurance premiums for
more than one year but less than five years is eligible for benefits for up to
12 months; if they have paid the premiums for more than five years but less than
10 years, the unemployed personis eligible for benefits for up to 18 months; if
they have paid the premiums for more than 10 years, the unemployed person is
eligible for benefits for up to 24 months.
-- Other unemployment insurance benefits. If an unemployed
person falls ill while enjoying unemployment insurance allowance, he or she is
entitled to receiving medical subsidies. If the unemployed person dies during
this period, his or her family can receive funeral subsidies as well as a
pension. In addition, an unemployed person may receive vocational training and
subsidies for job agency services when receiving unemployment insurance
allowance.
-- Unemployment insurance
provisions for farmers-turned-contract- workers who are employed by enterprises
and institutionsin urban areas. Their employers shall pay unemployment insurance
premiums as required, while the individual workers shall not. Those who have
worked for one year continuously, those who do not renew their contracts upon
expiration or those who terminate theircontracts before they expire can apply
for a living allowance, which shall come in a lump sum depending on the length
of time they have been employed.
Promoting Re-employment
While guaranteeing the basic livelihood
of the unemployed, the state actively looks for effective ways to steer
unemployment insurance in the direction of promoting re-employment. It has
strengthened the link between unemployment insurance services and re-employment
services. Through prompt registration of unemployment, active provision of
employment information and giving comprehensive employment guidance and job
agency services, the state helps unemployed people to enhance their capabilities
for competitive employment in both skills and mentality. It also increases the
input of unemployment insurance funds into job agency services and occupational
training. Through organizing training directly or purchasing R and D
achievements, the government provides all kinds of job skill training for the
unemployed in order to improve their capabilities for re-employment.
Guaranteeing the Basic Livelihood
of Laid-Offs from State-ownedEnterprises
In 1998, in view of the increased
pressure on state-owned enterprises in re-positioning their redundant personnel
and the inadequate bearing capacity of the unemployment insurance, the Chinese
Government created the basic livelihood guarantee system for people laid off
from state-owned enterprises.
-- Making sure that the laid-off
personnel from state-owned enterprises receive their basic living allowances in
full and on time. Re-employment service centers have been established in all
state-owned enterprises with laid-off personnel. After the latter have
registered at a re-employment service center, they shall receive from it a basic
livelihood allowance a little higher than the unemployment insurance payment in
their own locality. The re-employment service center also pays old-age, medical
and unemployment insurance premiums for laid-off people. The centers' funds for
basic living allowance payment to laid-off persons and their insurance premiums
generally come from the following three sources: one third from the local
government's financial budget, one third provided by enterprises, and the
remaining one third from the social pool program (mainly from unemployment
insurance funds). From 1998 to 2003, some 24 million laid-off persons from
state-owned enterprises across China had registered at the re-employment service
centers, and nearly 19 million of them had found new jobs. Those who had
registered at the centers had received allowances for basic livelihood in full
and on time, and the centers had also paid social insurance premiums for them.
-- Establishing the "three guarantees" system. Since 1998,
the Chinese Government has put into operation a system that provides for three
guarantees: basic livelihood guarantee for laid-off persons from state-owned
enterprises, unemployment insurance guarantee and minimum living standard
guarantee for urban residents. Laid-off persons can receive a basic living
allowance for up to three years. If they still have not found a job by then,they
can receive unemployment insurance payments. If the per capita income of a
family is below the local minimum living standard, they can apply for the
minimum living standard guaranteefor urban residents.
-- Integrating with unemployment
insurance. With the steady improvement of the unemployment insurance system and
the increase of the fund accumulations, since 2001, the basic livelihood
guarantee system for laid-offs from state-owned enterprises has been integrated
with the unemployment insurance program. State-owned enterprises now have ceased
to establish any new re-employment service centers, and, in principle, people
newly laid off by enterprises have also ceased to register at such centers.
Instead, enterprises just terminate their labor contracts according to law, and
the laid-off persons will then be entitled to unemployment insurance benefits
according to relevant regulations.
For some time in the future, the
problem of surplus labor force and the problem of irrational employment
structure will still exist, and unemployment insurance will continue to face
considerable pressure. The Chinese Government will make every effort to expand
the coverage of unemployment insurance, and standardize fund raising and payment
as well as its use and management. While guaranteeing the basic livelihood of
unemployed people, it will give further play to the role of unemployment
insurance in promoting re-employment.
III. Medical Insurance
In 1998, on the basis of previous
trials, the Chinese Government promulgated the "Decision on Establishing a Basic
Medical Insurance System for Urban Employees," promoting a national reform of
the basic medical insurance system for urban employees. By the end of 2003, some
109.02 million people around China had participated in the basic medical
insurance program, including 79.75 million employees and 29.27 million retirees.
Establishing a Basic Medical
Insurance System for Urban Employees
China has adopted a basic medical
insurance system for urban employees that combines social pool and personal
accounts. In principle, the medical insurance is managed locally.
-- Insurance scope and premium.
The basic medical insurance program covers all employers and employees in urban
areas, including employees and retirees of all government agencies, public
institutions, enterprises, mass organizations and private non-enterprise units.
People employed in a flexible manner can also participate in the basic medical
insurance program. The fundsfor basic medical insurance come mainly from
premiums paid by bothemployers and employees: the premium paid by the employer
is aboutsix percent of the total wage bill, while that paid by the employee is
two percent of his or her wage. Retirees are exempted from paying the premiums.
The individuals' premiums and 30 percentof the premiums paid by the employers go
to the personal accounts,and the remaining 70 percent of the premiums paid by
the employersgoes to the social pool program funds.
-- Payment standards. Medical
expenses are shared by the medical insurance fund and the individual: Outpatient
treatment fees (smaller amounts) are mainly paid from the personal account,
while hospitalization expenses (larger amounts) are paid mainly from the social
pool fund. The minimum and maximum payments from the social pool fund are
clearly set out. The minimum payment is, in principle, about 10 percent of the
average annual wage of localemployees, and the maximum payment is about four
times the averageannual wage of local employees. The medical expenses between
the minimum and maximum standards are mainly paid from the social poolfund, and
the individual pays a certain proportion. Expenses paid by retirees for medical
treatment and medicine are reasonably lower than those paid by people in
employment.
Improving Medical Insurance Management and Services
To standardize medical services
and reduce costs, the state simultaneously promotes the reform of the basic
medical insurance system, medical and healthcare system, and pharmaceuticals
production and circulation system. Catalogues have been made of medications,
medical consultations and medical services and facilities covered by the
national basic medical insurance scheme.Efforts have been made to ensure that
the insured enjoy necessary medical services, to curb unreasonable medical
expenses, and to enhance the utilization efficiency of the basic medical
insurance fund. A management method of the designation of medical institutions
and pharmacies allowed to provide services covered bymedical insurance has been
put into practice. A competitive mechanism has been established to select and
designate medical institutions and pharmacies that operate in a standard manner
and provide good services. Meanwhile, account settlement procedures have been
formulated and steadily improved for medical insurance handling organizations
and designated medical institutions.
Improving the Multi-Level Medical
Security System
While establishing the basic
medical insurance system, to meet the medical demands of different types of
people covered by the insurance, the state has established and improved a
multi-level medical security system to reduce personal burdens on the insured
individuals. In local areas, a system of subsidies for large medical expenses
has been set up in accordance with actual conditions to settle medical expenses
exceeding the maximum limit of the basic medical insurance payment, the funds
for the subsidies being raised mainly from individuals or enterprises. Thestate
encourages enterprises to establish supplementary medical insurance for their
employees, mainly for settling medical expenses not covered by the enterprise
employees' basic medical insurance. The part of the enterprise's supplementary
medical insurance premiums that is within four percent of the total wage bill is
booked as the production cost. A civil servants medical subsidy system has been
established for civil servants and employees of public institutions who formerly
enjoyed free medicalservices. The state is gradually establishing a social
medical aidsystem mainly funded by the government to provide basic medical
security for people with special difficulties.
The reform of China's medical
insurance system faces many heavytasks. In future, the state will further expand
the coverage of medical insurance to steadily include eligible people in all
kindsof employment in urban areas in the basic medical insurance
scheme;strengthen and improve medical insurance management and services; curb
the irrational increase of medical expenses, and provide better services for the
insured; establish and improve a multi-level medical security system, gradually
lessen personal burden onthe insured, and realize the stable operation and
sustainable development of the medical insurance system.
IV. Insurance for Work-related Injuries
The Chinese Government has made
great efforts to establish an insurance system for work-related injuries that
includes work-related injury prevention, compensation and recovery. After
January 2004, when the "Regulations on Insurance for Work-related Injuries" went
into effect, the coverage of such insurance has expanded rapidly. By the end of
June 2004, as many as 49.96 million employees had underwritten this insurance
scheme.
Establishing a Social Pool System
for Insurance Funds for Work-related Injuries
The state stipulates that all
enterprises and all individual businesses engaged in industry and commerce with
employees must participate in work-related injury insurance, and pay insurance
premiums for all their employees, permanent as well as temporary. The individual
employees do not pay such premiums. The work-related injury insurance scheme
adopts a social pool fund program with a balance of revenue and expenditure, and
collection determined by expenditure. The social pool funds are established by
cities at the prefecture level or above. The government determines the
differential premium rates according to the degree of risk of work-related
injuries involved in different sectors, and sets several premium rates within
each sector according to theinsurance payments and occurrence rates of such
injuries.
Defining the Social Security
Benefits
The work-related injury insurance
scheme adopts the principle of "no-fault compensation." The benefit items mainly
include medical expenditures for work-related injuries; injury and disability
subsidy, allowance and nursing fee according to the degree of loss of the
ability to work; funeral subsidy, pension for the keep of family members and a
lump-sum death subsidy payment, all of which go to the directly-related family
members ofthe deceased worker in the case of death resulting from a work-related
accident. The main qualifying condition for insurance payment is that the
employee has been injured as a result of a work-related accident or has
contracted an occupational disease during his or her working hours and within
his or her workplace.
Exercising a Labor Ability
Assessment System
The state has uniformly formulated
and promulgated a national standard for assessment of the degree of a
work-related injury andthe degree of a disability caused by an occupational
disease, whereby to assess the labor ability of an employee suffering from
disability and whose labor ability has been affected due to a work-related
injury, notwithstanding its being in a relatively stable condition after
treatment. The labor ability assessment includes rating of the degree of
physical impediment for labor and the degree of impairment to self-care ability.
A labor ability assessment committee, consisting of representatives from
relevant departments of the government, trade unions and employing units, is
formed in each provincial-level city and city divided into districts to be in
charge of the assessment of labor ability of injured and maimed employees.
Application for labor ability assessment can be submitted by the employing unit,
the employee suffering from the injury, or his or her directly-related family
members, to the local committee. Having received the application, the committee
will randomly choose members from its reserve of medical and health experts to
conduct the assessment, and give itsassessment conclusion based on the experts'
opinions.
Strengthening Work-related Injury Prevention and
Occupational Rehabilitation
The Chinese Government actively
promotes prevention of work- related injuries and occupational diseases through
improvement of engineering technology, publicity and education, formulation of
safety regulations, implementing safety and hygiene standards, andencouraging
employing units to improve production safety by manipulating their injury
insurance premium rates. Following the principle of "Safety and prevention
first," the government urges enterprises and employees to abide by the rules and
regulations concerning work safety and hygiene, and to strictly enforce the
state work safety and hygiene rules and standards, so as to prevent accidents
during work, and reduce occupational hazards. The state actively explores
methods of occupational rehabilitation,providing injured workers with injury
recovery, psychological recovery, occupational training and employment guidance.
Occupational rehabilitation centers and hospitals have been set upin some areas
to help injured workers to overcome physical and mental problems, regain their
health and ability to work, and return to their jobs.
V. Maternity Insurance
In 1988, the state introduced a
reform of the maternity insurance system in some areas. At the end of 2003,
there were 36.55 million employees covered by maternity insurance. In the year
of 2003, 360,000 employees received maternity insurance benefits.
The maternity insurance system
mainly covers urban enterprises and their employees, and in some places women
employees of government agencies, public institutions, mass organizations and
enterprises. The premiums are paid by the employers participating in the
maternity insurance scheme, and should not be more than onepercent of the total
wage bill. Individual employees do not pay the premiums. Employers not having
participated in the scheme willstill be responsible for providing maternity
insurance benefits. Employees giving birth to babies may enjoy a childbirth
allowance for 90 days according to law. Women employees who have given birthto
babies or had abortions shall maintain their original wages andpositions, and
get reimbursements for their medical expenses according to related regulations.
VI. Social Welfare
The Chinese Government actively
promotes the development of social welfare, raising funds through various
channels to provide social welfare benefits for the elderly, orphans and the
disabled.
Social Welfare for the Elderly In
accordance with the "Law of the People's Republic of China on the Protection of
Elderly People's Rights and Interests," the state and the society have adopted
measures to improve conditions for such people's livelihood, health and
participation in social development. Governments at alllevels include services
for elderly people in their socio-economicdevelopment plans, gradually increase
investments in services for elderly people, and encourage investment from all
sectors of society, so as to enable such services to grow in coordination with
socio-economic development. In recent years, thanks to the promotion of the
socialization of social welfare undertakings, a social service system for
elderly people has gradually taken shape,with state- and collective-run social
welfare organizations for elderly people as the backbone, those sponsored by
various social sectors as a new growth point, community welfare services for
elderly people as support, and services for elderly people living at home as the
basis. Today, there are 38,000 social welfare organizations of various kinds for
elderly people, with 1.129 million beds, or 8.4 beds for every 1,000 people over
the age of 60. In 2001, the state introduced the "Starlight Plan -- National
Community Welfare Service for Elderly People." By June 2004, a total of 32,000
Starlight Homes for Elderly People had been built or rebuilt in urban and rural
areas all over China, with a total investment of 13.49 billion yuan.
Social Welfare for Children
According to relevant laws and
regulations, such as the "Law ofthe People's Republic of China on the Protection
of Minors" and the "Education Law of the People's Republic of China," the state
provides comprehensive welfare for children, including education and planned
immunization, and takes special care to ensure the livelihood, recovery and
education of children with special difficulties, such as disabled children,
orphans and abandoned babies, by providing welfare projects, facilities and
services. Today, China has 192 special welfare institutions for children and600
comprehensive welfare institutions with a children's department, accommodating a
total of 54,000 orphans and disabled children. There are also nearly 10,000
community services around China for orphans and disabled people, such as
rehabilitation centers and training classes for mentally retarded children.
The Chinese Government has decided
that, starting from 2004, itis going to carry out the "Tomorrow Plan --
Operations and Rehabilitation for Disabled Orphans." The plan will cover a
three-year period and involve 600 million yuan in fund. Under the plan, each
year 10,000 disabled orphans will receive operations and rehabilitation
services. The aim is that by 2006 all the disabled orphans with surgical
operation indications in all the social welfare institutions around China will
have received effective operations and rehabilitation services.
Social Welfare for Disabled People
The "Law of the People's Republic
of China on the Protection of Disabled People" promulgated by the state provides
legal guarantees for disabled people's rehabilitation, education, employment,
cultural life and social welfare. The government helpsdisabled people to get
employment by running welfare enterprises, providing employment opportunities in
a certain proportion, and supporting the self-employment of disabled people.
Special care for disabled people is provided through such welfare measures as
temporary aid, concentrated support and the running of accommodation
institutions for disabled people. By the end of 2003,a total of over 4.03
million disabled people in urban areas aroundChina were in employment, and 16.85
million disabled people in rural areas were engaged in productive labor; 2.59
million impoverished disabled people enjoyed guarantees for their livelihood;
442,000 disabled people enjoyed concentrated support and the "five guarantees"
(of food, clothing, medicare, housing and burial expenses) in various welfare
institutions and homes forthe aged; 2.46 million disabled people were receiving
temporary aid, regular allowances and special allowances; and over 7.01 million
impoverished disabled people were receiving assistance to solve their problem of
basic food and clothing. In 2003, governments at all levels earmarked 1.5
billion yuan for services for the disabled, and raised nearly 100 million yuan
for social welfare funds.
VII. Special Care and Placement
The special care and placement
system is one by which the Chinese Government provides materials and expresses
compassion mainly for servicemen and their families. At present, such people
number over 40 million.
To protect the rights and
interests of people eligible for special care, the Chinese Government has
promulgated the "Regulations on Commending Revolutionary Martyrs," "Regulations
on Special Care and Preferential Treatment for Servicemen," and similar laws and
regulations. The state sets different grades and standards for special care and
preferential treatment according tothe eligible people's capacities and
contributions, and with reference to the level of economic and social
development. State compensation is provided to families of martyrs and
servicemen whodied on duty or of illnesses, and wounded and disabled
servicemen.Regular and fixed living allowances are provided for special
casessuch as demobilized veterans. Allowances are universally distributed to the
families of conscripts. Special cases, including disabled servicemen, enjoy
social preferential treatmentin terms of medical care, housing, transportation,
education and employment. In 2003, there were 4.65 million people eligible for
state compensation and subsidy, and government budgets at all levels for such
compensation and subsidy totaled 8.79 billion yuan.
The "Military Service Law of the
People's Republic of China," "Regulations on Placement for Demobilized
Conscripts," and similar laws and regulations provide for the placement and
resettlement ofdemobilized servicemen. The government provides employment for
demobilized soldiers in urban areas, and grants a lump-sum subsidyas well as
preferential policy support for those who seek their own employment. Demobilized
conscripts from rural areas have theirdifficulties in production, livelihood and
medicare settled according to their different situations. Government and
non-government organizations, enterprises and public institutions provide
preferential recruitment for ex-servicemen from both urbanand rural areas.
Secondary schools and schools of higher learning provide preferential admission
to ex-servicemen. Appropriate care is given to wounded and disabled
ex-servicemen in terms of employment and livelihood. Arrangements for placement
and resettlement are made for demobilized, transferred and retired military
officers (including non-commissioned officers). Now, relevant services have been
established by governments at all levels.
Proceeding from protecting the
immediate interests of the people eligible for special care and preferential
treatment, as well as ex-servicemen, the Chinese Government is determined to
mobilize all sectors of the society to continuously improve the special care and
placement system, increase the level of protection for people of this category,
promote legal and institutional guarantees for the placement and resettlement of
ex-servicemen, and protect the legal rights and interests of the people eligible
for special care and preferential treatment.
VIII. Social Relief
Proceeding from the situation of
national development, the Chinese Government has made the greatest efforts to
provide the minimum standard of living for the urban and rural poor, to provide
relief to natural disaster victims and to urban vagrants and beggars, while
promoting and encouraging all kinds of social mutual help activities.
Guarantee of the Minimum Standard
of Living for Urban Residents
In 1999, the Chinese Government
promulgated the "Regulations onGuaranteeing Urban Residents' Minimum Standard of
Living," which stipulates that urban residents with non-agricultural permanent
residence permits whose family's per capita income is lower than the local urban
residents' minimum standard of living can receive basic subsistence assistance
from the local government; those withneither source of income nor working
capability, nor legal guardian, supporter or fosterer can receive in full the
minimum living allowance according to the minimum living standard of localurban
residents. The minimum living standard is decided primarily on the basis of
urban residents' average income and consumption level per capita, the price
level of the previous year, the consumption price index, the local cost
necessary for maintaining the basic livelihood, other connected social security
standards, the materials for the basic needs of food, clothing and housing, and
the expenditure on under-age children's compulsory education. Meanwhile,
consideration must also be given to the level of local socio-economic
development, the number of people eligible for receiving the minimum living
allowance and the local government's fiscal capacity. Funds for this purpose are
included in the fiscalbudgets of the local governments. For local governments
that have very tight budgets, the Central Government will provide financial
support. By the end of 2003, there were 22.47 million urbanites nationwide
drawing the minimum living allowance, which was an average of 58 yuan per person
per month. A total of 15.6 billion yuan for the minimum living allowance was
allocated from government budgets at central and local levels in 2003, which
included the 9.2 billion yuan of the Central Government's subsidies to the
disadvantaged central and western regions.
Natural Disaster Relief
The state has set up an emergency
system and a social relief system to deal with abrupt natural disasters. Taking
people's lives as the most important thing, the government has made timely
efforts to save and evacuate disaster-stricken people, and to leadthem to engage
in self-relief production and mutual help. In this connection, it has also
mobilized all social sectors to render help, so as to minimize as much as
possible the casualties and property losses brought about by natural disasters,
and to ensure that disaster victims can have adequate food, clothing and
lodging,and access to medical treatment. Governments at all levels have enlisted
expenditure in their budgets for the storage of disaster-relief materials and
for evacuating victims. In 2003, the expenditure for such purposes from
governments at various levels reached 5.31 billion yuan, of which 4.05 billion
yuan came from the Central Government.
Relief for Urban Vagrants and
Beggars
On August 1, 2003, the state
promulgated the "Measures for the Administration of Relief for Vagrants and
Beggars Without Assured Living Sources in Cities." Based on the principle of
"Receiving aid of one's own free will, and giving help gratis," relief for
vagrants and beggars who have no assured living sources in cities should be
administered with compassion, and that relief should be provided in accordance
with the different circumstances and needs of the recipients, so that they can
receive relief in terms of food, lodging, medicare, communications,
transportation to their hometowns and escort. By the end of 2003, some 909 such
relief administrative centers had been set up throughout the country, offering
help to 210,000 cases of urban vagrants and beggars who had no assured living
sources that year.
Social Mutual Help
The state encourages and supports
members of society to organizeand participate voluntarily in the efforts to give
help to the poor and needy, promotes the development of a social donation
system, sets up and improves regular social institutions, and a network of
offices and storage facilities to receive donations at any time from the general
public. By the end of 2003, there were some 28,000 social donation centers in
large and medium-sized cities and in some small cities with adequate facilities.
From 1996 to 2003, a total of 23 billion yuan in donations was receivedfrom the
general public (including goods converted into money), together with 960 million
pieces of clothing and quilts, which helped an accumulative total of 400 million
disaster victims and poverty-stricken people. Governments at the grassroots
level also operate community services to provide care and services to the poor
and needy. Trade unions at all levels organize "heart-warmingactivities" every
year to offer help to badly-off families. From 1994 to early 2004, a total of
18.11 billion yuan had been raised for this purpose, and 55.778 million sympathy
visits had been paidto families of poverty-stricken employees.
China's trade unions at all levels
also organize mutual help andsocial security activities. By the end of 2003,
some 18,000 mutualhelp and social security organizations had been set up by the
nation's trade unions, with 7.23 million people participating in the social
insurance program. Some 1,839 trade union organizationshad started such employee
mutual help and social security programswhich covered 14.85 million
participants, and six million cases were given assistance.
IX. Housing Security
The Chinese Government actively
promotes the development of an urban housing security system which includes
mainly the system of publicly accumulated housing funds, the system of generally
affordable and functional housing, and the low-rent housing systemfor the
purpose of unremittingly improving urban residents' housing conditions. By the
end of 2003, the average floor space had reached 23.7 sq m per capita for urban
residents.
The System of Publicly Accumulated
Housing Funds The system of publicly accumulated housing funds is a policy-based
financing channel by which the Chinese Government tries to solve the
housingproblem of employees. The funds are gathered monthly from government
agencies, public institutions, enterprises, mass organizations, private
non-enterprise units and their on-the-job employees in a certain proportion to
the employees' salaries, and such funds belong to individual employees. The
publicly accumulated housing funds are deposited in devoted accounts and are
used exclusively for employees to purchase, build and renovatetheir houses, and
can be loaned to the employees for these purposes. The publicly accumulated
housing funds are characterizedby obligation, mutual help and housing security.
In 1994, this system was implemented in cities throughout China. In 1999, the
state issued the "Regulations for the Management of the Publicly Accumulated
Housing Funds," and reissued them in 2002, to ensure that the system functions
in an institutionalized and standardizedway. Now, an administrative system has
been basically set up, which involves decision-making by the Administrative
Committee of the Publicly Accumulated Housing Funds, operation by the
Administrative Center of the Publicly Accumulated Housing Funds, deposit in
devoted bank accounts as well as financial supervision.The publicly accumulated
housing funds can be booked as cost of enterprises, and are exempt from personal
income tax. The funds can also enjoy preferential low-interest loan policy. By
the end of 2003, a total of 60.45 million employees throughout China had opened
accounts for publicly accumulated housing funds, raising a total of 556.3
billion yuan, of which 174.3 billion yuan was withdrawn from the banks by
employees for buying or building theirhouses or for retirement, and a total of
234.3 billion yuan was granted as personal housing loans to help 3.27 million
employees' families to purchase or build houses. The system of publicly
accumulated housing funds has played an important role in the improvement of
people's housing conditions.
Generally Affordable and Functional Housing
System
In 1998, the Chinese Government
decided to build generally affordable and functional housing. Affordable and
functional housing means housing for which the government provides preferential
policies, and sets the construction standards, the selling price and the users'
qualification criteria. It is policy-based, security-type commercial housing.
Households meeting the following requirements can apply to buy or rent a suite
of such housing: those having local registered permanent residence
permits(including servicemen eligible under local resettlement standards)or
those specified by the city or county government; those with serious housing
problems -- without housing of their own or with their current housing space
below the standards set by the city orcounty government; households whose family
incomes meet the incomestandard set by the city or county government; and
households meeting other conditions set by the city or county government. A
low-profit principle is maintained for such housing when it is sold or rented.
Only after a specified length of time following the purchase of such housing may
the owner sell it at the market, and a portion of the earnings therefrom must be
turned over to thegovernment. The purchase of this kind of housing must be
subject to application, examination and public announcement, thus emphasizing
public transparency and strict supervision and administration. From 1998 to
2003, the construction of 477 millionsq m of such housing space was completed.
The Low-Rent Housing System
Since 1998, the Chinese
Government has made active efforts to promote the low-rent housing system and to
continuously improve housing security policies. Temporary exemption of property
tax andbusiness tax is applied to publicly owned housing and low-rent housing
lent out at prices prescribed by the government. Under theguidance of uniform
state policies, the local governments have setup their own low-rent housing
systems for urban minimum-income households in accordance with the level of
local economic and social development. Such a housing security system, supported
mainly by the government's financial budget while the low-rent funds are pooled
from other channels, is practiced in many ways --with housing rent subsidy as
the major form, supplemented by the supply of basic furniture and rent
deduction. For households whoseincomes and housing space are below the standards
set by the localgovernment, the latter should ensure that their basic housing
needs are met by application, registration and waiting one's turn.In 2003, this
low-rent housing system for minimum-income families was established in 35 large
and medium-sized cities.
X. Social Security in Rural Areas
The majority of the Chinese
people live in rural areas, where the economic development level is
comparatively low. In the rural areas the land, as a means of both production
and livelihood, is owned collectively where the contractual household
output-related responsibility system is practiced. Under the influence of
China'straditional culture, there is a time-honored tradition of provision by
the family, security coming from self-reliance and help from the clan. In
accordance with the characteristics of rural socio-economic development, the
state's social security measures in rural areas are different from those
practiced in cities.
Experimenting to Establish an
Old-Age Insurance System in RuralAreas
The old-age security in China's
rural areas is centered mostly on families. In the 1990s, China began to try out
an old-age insurance system in some of the rural areas in accordance with
theactual level of local socio-economic development. In light of the principle
that "The premiums are paid mainly by individuals themselves, supplemented by
collectively pooled subsidies and supported by government policies," an old-age
insurance system with the accumulation of funds taking the form of personal
accounts was established. By the end of 2003, the work of old-age social
insurance had been carried out to various extents in the rural areas of 1,870
counties (cities, districts). Some 54.28 million people had underwritten the
old-age insurance program, which had accumulated a fund running to 25.9 billion
yuan, with 1.98 million farmers drawing old-age pension. In 2004, the Chinese
Government began to experiment with a system that supports and rewards
households that practice family planning by having only one child or two girls
in some of the rural areas. Each person of such couple may receive a minimum of
600 yuan a year from the age of 60 till the end of his or her life. This reward
will be provided jointly by the central and local governments.
Establishing a New Rural Cooperative Medical Service
System
In order to guarantee that
farmers' basic medical needs are satisfied, to alleviate their medical burdens
and to address the problem of poverty caused by illness or prevent them from
getting poor again because of illness, in 2002 the Chinese Government began to
set up a new rural cooperative medical service system based mainly on a
financial-pool-against-serious-disease scheme. Farmers can participate freely in
such a cooperative medical system, which is organized, led and supported by the
government with funds coming from the government, collectives and the
beneficiaries. At present, the system is being tried out in 310 counties
(cities) in 30 provinces, autonomous regions and municipalities directly under
the Central Government. By June 2004,the system had covered 95.04 million rural
residents, with 68.99 million participants and 3.02 billion yuan in raised
funds, of which 1.11 billion yuan was in the form of financial subsidies from
local governments at various levels, and 390 million yuan wasin the form of
Central Government subsidies to the central and western regions.
Practicing Rural Social Relief
The "five guarantees" system was
initiated in China in the 1950s.In 1994, the State Council issued the
"Regulations Concerning the Work of Providing the 'Five Guarantees' in the Rural
Areas." It stipulates that elderly people, disabled people and minors meetingthe
following conditions in rural areas can enjoy the "five guarantees" of food,
clothing, housing, medicare and burial expenses (compulsory education for
minors): Those who have no legal guardian to provide for them, or whose legal
guardians are unable to provide for them; those who have no working ability;
andthose who have no source of income. To take care of elderly peoplein the
"five guarantees" category who cannot look after themselvesalone, homes for the
aged have been built, and have gradually become a major form of providing the
"five guarantees" for the elderly. By the end of 2003, there were 2.545 million
people covered by the "five guarantees," and 24,000 homes for the aged providing
accommodation for 503,000 elderly people in this category.
In view of the uneven economic
development and the large disparity in financial conditions between regions, the
Chinese Government encourages areas with adequate capacity to establish a system
that guarantees the minimum standard of living for rural residents. In other
areas, the basic subsistence relief system covering destitute households is
practiced under the principle of "government relief, social mutual help,
offspring support and stabilized land policy." Meanwhile, medical relief is
provided forsick farmers who are in great difficulty. By the end of 2003, there
were 12.57 million poverty-stricken people in rural China who enjoyed the
minimum living allowance and subsistence relief for destitute households.
Conclusion
After years of experiments and
practice, a social security framework with Chinese characteristics has taken
initial shape. However, China still has a long way to go to develop its social
security services to a satisfactory level. The aging of the population will put
more pressure on the old-age pension and medicare expenditure, while the
progress of urbanization will makethe establishment and improvement of a social
security system covering both urban and rural areas more urgent. More employees
ofnon-state-owned businesses and people employed in a flexible manner will be
covered by the social insurance system as employment forms become more
diversified. All this will raise new requirements for the smooth operation of
China's social security system and for the establishment of a long-term
mechanism which will ensure the sustainable development of the social security
services.
To press ahead with the
improvement of the social security system is an important task for the Chinese
Government in its efforts to build a moderately prosperous society in a
comprehensive way. The increase in China's overall economic strength as a result
of the sustained, rapid, coordinated and healthy development of China's national
economy, the implementation of the scientific concept of overall, coordinated
and sustainable development, and a social security system suited to China's
national conditions and established after many years ofexploration, will pave
the way for China's social security system to develop continuously. In the years
to come, the Chinese people will benefit more from the nation's development and
progress, and enjoy more plentiful fruits of its material civilization.
Enditem.
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