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China is located in the east
of the Asian continent and by the western shore of the Pacific
Ocean. It has a land area of more than 9.6 million Sq.kms, and
is the third largest country in the world. It extends about
5,500 Sq.kms south to north and 5,200 Sq.kms east to west. In
terms of temperature, it can be sectored from south to north
into tropical, subtropical, warm-temperature, temperate and
cold-temperature zones. China has five time zones.
Taking a bird’s-eye view of China, the terrain gradually
descends from west to east like a staircase. In the east of
China, there is an approximately 18,000 km coastline. In the
west, there stands the Qinghai-Tibet Plateau known as “the
roof of the world”, has an altitude of more than 4,000 meters.
A large majority of China has a warm climate and distinctive
seasons. Continental monsoon climate is the main character of
the climate in China. |
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China is recognized as one
of the great ancient civilizations in the world. Chinese history
and culture origins from the Yellow River and the Yangtze River.
Archaeological studies reveals that two million years ago there
is human being existed in China who created the prehistoric
civilization of the Old Stone Age. It is around 4,500 years
ago or even earlier that China set up a monarchical system and
started its civilization. In 221 B.C. Qin Dynasty, the first
centralism dynasty in Chinese history, was established. From
then on, the dynasty of centralism lasted more than 2,000 years
in China with various dynasties altered until 1911. On October
1, 1949, the People's Republic of China was founded.
Within such a long history, China has created a magnificent
culture. The four great inventions of ancient China -- Compass,
papermaking, gunpowder and printing had spread all over the
world and made great contributions to the progress of human
civilization. Chinese culture has extremely strong comprehensive
nature. It has been taking advantage of other civilizations
in circumjacent regions while communicating with other countries
and nationalities for thousands of years and finally unites
the culture. Nowadays, the Chinese, based on the glorious
past, are creating a new life on the old land and constructing
a well-off society in an all-round way.
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China is the most populated
country in the world, with around 1.3 billion people by the
end of 2002, accounting for about one fifth of the world’s total
population. Since the 1970s, China has implemented the policy
of family planning and thus the birth rate begins to decrease
gradually. By 2002, the annual rate of the population growth
had decreased to less than 1.286 percent and 0.645 percent for
natural growth rate of the population. At present, China is
basically turned into the type of population reproduction of
low birth rate, death rate and natural growth rate of population.
China is facing the increase of an aging population and the
average anticipate lifespan in 2002 is 71 years old. The aged
above 65 years old reached 7.1% of the total population. China
is now in the process of urbanization and in 2002 the urban
population accounts for around 37.7% of the population.
China is a united multi-ethnic nation consisting of 56 nationalities.
The majority of the population is the Han nationality (accounting
for 91.6 percent of the total population), and other 55 nationalities
are customarily referred to as the minorities.
China now consists of 23 provinces, 5 autonomous regions,
4 municipalities directly under the jurisdiction of the Central
Government and 2 special administrative regions. Beijing is
the capital. Taiwan province is an inseparable part of China.
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China is a developing country
with great potentialities. Since the implementation of the policy
of reform and opening-up in 1979, China has made remarkable
achievements in its economy. From 1979 to 2002, the average
annual growth rate of GDP was 9.4%, which reached 10239.8 billion
RMB in 2002 (according to the current foreign exchange rate,
8.28 RMB=1 USD). The total import and export amount is 620.8
billion USD, accounting for 4.7% of the total world trade.
The continuous increase of Chinese economy brings great
change to people’s daily life which has generally reached
the well-off level. In 2002, the per capita GDP reached 8,000
RMB.
At present, the socialist market economy system is well on the
way to being established in China. The basic economic system
to develop diversified economic elements while keeping the public
sector of the economy in the dominant position has been established.
The structure of opening-up in all-sides, multi-field and multi-level
has basically been set up. |
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China’s social security system
began in the early 1950s. The Measures on Solving Unemployed
Workers promulgated in 1950 played an active role in solving
unemployment issues left by the Old China. Regulations on Labor
Insurance of the People’s Republic of China was promulgated
in 1951, which was applicable to all public and private enterprises
covering pension insurance benefit, disability benefit, survivor’s
allowance, sickness benefit, medical care benefit, work injury
insurance allowance, occupational disease benefit and maternity
insurance benefit. Afterwards, the State promulgated a series
of social security policies concerning the Natural Disaster
Relief System and the Special Care and Placement System to make
improvements and adjustments for these policies according to
the demands of social development.
Since the middle term of 1980s, China has undertaken a series
of reforms of the social security system: 1984 witnessed the
reform of pension insurance system for enterprise employees;
in 1986, urban unemployment insurance system was established;
in 1994,1996 and 1998, maternity insurance system, work injury
insurance system and medical insurance system reforms started
respectively; in 1999, the Minimum Living Standard Security
System was established; in 2002, the new rural cooperative medical
system started to be set up. The reform and development of social
security system have played an important role in promoting economic
development and safeguarding the social stability. |
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China’s social security system
mainly includes contribution-based social insurance system and
non contribution-based social relief system, the social welfare
system, the special care and placement system and the social
mutual help.
 Social Insurance
China’s current social insurance system includes basic pension
insurance, unemployment insurance, basic medical insurance,
work injury and maternity insurance. The social insurance system
and the social insurance fund ensure individuals to get help
and economic support in the case of old age, unemployment, sickness,
work injury and maternity, which guarantees their basic life
and health.
Social Relief
The Chinese government provides economic support for those citizens
to maintain the minimum livelihood. The main target group are:
those with no labor capability and no income source; with income
source, but their living standard lower than the legal minimum
standard; with labor capability, but having temporary interruption
of income due to accidents or disasters.
Social Welfare
The Chinese government provides funds to ensure the livelihood
of senior citizens, orphans and the handicapped persons who
are in extraordinary straitened circumstances.
The Special Care and Placement System
The Chinese government and society compensate, commend and allocate
the special group of people who have rendered meritorious services
to the State and society such as soldiers.
the Social Mutual Help System
The Chinese government encourages and supports social group
and members to organize and attend the activities of helping
the poor and needy. The current activities mainly include the
services for the poor and needy rendered by trade unions, federation
of women and other organizations, charity donations from non-governmental
group and mutual help organized voluntarily. |
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The central government and
the local governments are jointly responsible for administering
China’s social security system. The main responsibilities of
central government are: formulating national regulations, policy
and standard; providing financial assistance to the areas in
extreme poverty. Local governments have the following responsibilities:
formulating the local regulations, policy and standard according
to the national policy, collecting the social security funds,
distributing the social security benefits.
The institutions in central government that administrate
social security related issues mainly are Ministry of Labor
and Social Security, Ministry of Civil Affairs, Ministry of
Public Health, Ministry of Finance. Ministry of Labor and
Social Security is in charge of pension insurance, unemployment
insurance, urban medical insurance of employees, work injury
insurance, maternity insurance; Ministry of Civil Affairs
administers social relief, social welfare, special care and
placement system; Ministry of Public Health manages the rural
cooperative medical system; Ministry of Finance is responsible
for formulating the financial policy and accounting system
for social security, supervising the revenue and expenditure
of social security funds, providing the financial subsidy
for social security schemes. Similar institutional arrangements
have been set up at provincial, city and county levels, taking
the corresponding responsibilities.
At the central, provincial, municipal and country levels, the
public and non-profit social insurance operating agencies which
are affiliated to the labor and social security administrative
departments have been established with a working staff of 100,000
people. Their major responsibilities are: registration of the
insured; collecting the social insurance contribution; recording
the contribution; managing individual accounts; identifying
the claiming qualification and distributing the benefits; managing
the social insurance funds; providing inquiry service. The social
insurance operating agency is also responsible for implementing
the social insurance agreements signed between China and other
countries. |
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At present, the urban enterprise
employees, farmers,working staff for the government organizations
and institutions implement different pension insurance schemes.
The urban enterprise employee pension insurance system was
initiated in early 1950s and began to reform in 1984. In 1997,
a basic and national unified pension insurance system was
set up in urban enterprises with the combination of social
pooling and individual account.
It applies to the workers in all kinds of enterprises in
urban area and is expanding to the Self-employed and freelance.
By the end of December 2003,the total participants are 154.90
million among which 38.52 million employees enjoy the pension
insurance benefits. The current contribution rate is: not
more than 8% of individual salary, 20% or so of enterprise’s
total payroll. The basic pension insurance fund consists of
these two contributions. Governments at various levels will
provide financial subsidy when the funds is not inadequate.
Now the Chinese government is making efforts to improve the
pooling of basic pension insurance funds to a provincial lever.
Social insurance agencies establish an individual account
of pension insurance for each employee in proportion to 11%
of the salary and the individual contribution will be totally
put into this account. 3% of the enterprise contribution is
allocated into the individual account and the rest part is
used to establish the pooling fund. Employees at legal retirement
ages and who have paid their contribution for no less than
15 years are entitled to receive monthly pension, which are
distributed by banks, post offices and other social service
agencies. The basic pension insurance benefit is constituted
of two components—the basic pension benefit which is 20% of
the local employee’s average salary and the individual account
benefit which is 1/120 of the accumulation in the account.
Those who began to work before the implementation of the new
system and retired after are entitled to receive the transitional
pension benefit. The State adjusts the pension level in accordance
with the economic development. From 1998 to 2002, the basic
pension benefit has been raised 50% averagely. In order to
overcome the aging peak, the Chinese government specially
established the National Social Security Fund in 2002, with
130 billion of reserve currently. The government supports
and encourages the enterprise to establish annuity plan in
which nearly 7 million people have participated currently.
Retirement system applies to the employees in governmental
organizations and parts of institutions. The pension expenditures
are paid by the State without individual contribution and
the pensions are calculated by the salary and the years of
service. Currently, this system has been adopted by 30 million
employees.
Pension insurance in rural areas is mainly based on the family
support considering the financial support by the community and
the State. After 1991, the pilot program of accumulating individual
accounts was launched in some rural areas to, on the principle
of “basis on the individual contribution support by the towns
and villages, and enjoyment of the preferential policy by the
State.” Currently, about 55 million people have participated
in this pilot scheme. |
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| In 1986, the central government
started to establish the unemployment insurance system in state-owned
enterprises. In 1999, the State Council issued Unemployment
Insurance Regulations, covering all urban enterprises and institutions
as well as their employees. By December 2003, the total nationwide
participants were 103.73 million and the number of receiving
the unemployment insurance benefits in that month was 4.15 million.
At present, individuals pay 1% of their salary and enterprises
pay 2% of the total payroll. The qualification of receiving
the unemployment insurance benefit: (1) the working units and
the individuals must participate in the unemployment insurance
and pay the contribution more than one year; (2) termination
of employment is not due to personal reasons; (3)he should fill
in the unemployment registration and actively search for job.
The rate of the unemployment benefit, mainly the unemployment
insurance, is determined by the local government, which is on
the principle of less than minimum local salary but more than
the minimum living standard. The maximum of the drawing period,
which is calculated by the years of paying contributions, is
24 months. The medical allowance can be enjoyed if the unemployed
suffers an illness during the period of receiving the unemployment
insurance benefit; the funeral allowance and survivor allowance
can be enjoyed if the unemployed is dead during receiving benefit;
the unemployed can also enjoys occupational training and job
introduction allowance during receiving the benefit. |
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In 1998, the Chinese government
promulgated the Decision on Establishing the Basic Health Insurance
Scheme for Urban Employees, enforcing to reform the basic health
insurance system for urban employees throughout the country.
The basic health insurance system covers all urban employers
and employees. By December 2003, 108.70 million people have
participated in the basic health insurance. The main source
of fund is contributions paid by the working units and the employees.
At present, the enterprise contribution is 6% of total payroll
and the individual contribution is 2% of individual income.
The mode of combining social pooling with individual accounts
is adopted. Each participant is opened an individual account
by the insurance agency and the total individual contribution
will be put into this account while30% of the enterprise contribution
will be placed into this account and the rest 70% of the enterprise
contribution will be injected into the pooling fund. The fund
in the individual account is mainly used to pay the outpatient
and the small amount of medical expenditure while the cost of
hospitalization and the large amount of medical expense are
financed from the pooling fund which has a starting point of
payment and a ceiling line of payment.
In order to ensure the participants to enjoy the basic medical
service and effectively control the fast increase of medical
cost, the Chinese government has strengthened the health service
management, formulated the basic health insurance drug list,
diagnosis and treatment item standard, and health service facility
standard. The government will identify the qualification of
the health facilities and the pharmaceutical stores for the
options of the participants. At the same time, the State promotes
the reforms of the health facilities and production and circulation
system.
Apart from the basic medical insurance, a system of mutual assistance
in the case of large amount medical costs has been set up throughout
the country to cover medical costs beyond the ceiling of basic
medical insurance. The State has also set up a medical subsidy
program for civil servants. Enterprises are encouraged to set
up enterprise supplementary medical insurance for their employees
if possible. The State will also gradually institute a social
medical assistance system to provide basic medical security
for the impoverished population.
In 2002, the Chinese government decided to carry out the new
type of rural cooperative medical system and rural medical assistance
system. The new type of rural cooperative medical system is
organized, guided and supported by the State with the voluntary
participation of the farmers. Fund comes from governments at
various levels, town and village as well as the individuals
to meet the basic medical needs of the rural people. The medical
assistance system is financed by the government and the society
and provide subsidy for those who have participated in the new
rural cooperative medical system. This scheme is being launched
in some localities. |
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Since 1950s, China has adopted
the work-related injury insurance born by employers. In 1996,
Ministry of Labor and Social Security promulgated the Provincial
Method on Work-related Injury Insurance For Enterprise Employees
and began to establish work-related injury insurance scheme
in some regions. In the same year, the Standards for Appraising
Industrial Injuries and Disabilities Caused by Occupational
Diseases were adopted, providing the basis for such appraisal.
On April 27, 2003, the Chinese government promulgated the Regulations
on Work-related Injury Insurance and it will take into force
on January 1, 2004.
The Regulations on Work-related Injury Insurance covers all
kinds of enterprises and the self-employed with employees. Work
–related injury insurance scheme is financed by enterprises
without individual contribution. The contribution rate varies
according to different industries and different enterprise.
The employer contribution forms the injury insurance funds to
be pooled at the country level. Payment of industrial injury
insurance funds mainly covers medical costs occurred during
the treatment of the injury, , injury or disability subsidies,
pension for the injury or disabled person, and injury or disability
nursing charge. |
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| The maternity insurance system
was initiated in 1950s. In 1994, the former Ministry of Labor
promulgated the Provincial Method for Maternity Insurance for
Enterprise Employees and began to implement the maternity insurance
system. The maternity insurance contribution is paid by the
employers in proportion of less than 1% of the total payroll
without individual contribution. The employees enjoy childbirth
allowance and medical costs during maternity leave no less than
90 days. Employers are prohibited to reduce the basic salary
payment and terminate the labor contracts during the period
of childbirth. |
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The Chinese government has
strengthened administrative and social supervision over social
insurance funds in terms of budget and final accounting, collection
and delivery, operation and management. The scope of supervision
includes social insurance funds, enterprise supplementary annuity
and supplementary medical insurance fund, the national social
security fund and special subsidy fund. The objects of supervision
are: fund collecting institution, payment delivering agency,
operating and managing organization. The main task of supervision
are establishing and improving the policy of fund management
and supervision, regulating the collection, payment and investment
of the fund; setting up the implementation of the policy and
securing the safety of the fund.
At present, labor and social security administration departments
at all levels have established nationwide supervisory organs.
In 19 provinces, areas and cities, the provincial social security
supervisory committees have been established and formed a supervision
and management system concerning social security funds through
a combination of administrative supervision, social supervision
and internal institutional control of social security fund. |
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In early 1950s, the Chinese
government set up a social relief system for the urban and rural
poor. In 1993, the Chinese government began to reform the social
relief system in cities, seeking to try out a minimum living
standard security system. In 1999, the Chinese government promulgated
the Regulations on Guaranteeing Urban Residents’ Minimum Standard
of Living. At present, the security system has been established
in all cities, formally established counties and towns throughout
the country to ensure the basic livelihood of all urban residents.
Funds for this purpose are included in the fiscal budgets
of the local people’s governments and the subsidy from the
central government. The minimum living standard is determined
according to the cost for maintaining the basic living standard
in different regions. Urban residents whose average family
income is lower than the minimum living standard can apply
for the minimum living allowance. Investigation of the family’s
income shall be conducted before distribution of the minimum
living allowance, the level of which is calculated in terms
of the difference between the family per-capita income and
the minimum living standard.
In recent years, part of the rural areas has started to set
up a similar minimum living standard security system. |
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| China frequently suffers
the ravages of natural disasters. The Chinese government has
set up a special social relief system to relieve the suffering
of victims of unexpected natural calamities. Every year, relief
funds are allocated from government budgets at central and local
levels for this purpose. |
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| The government issued the
Law of the People’s Republic of China Guaranteeing the Rights
and Interests of Senior Citizens, Law of the People’s Republic
of China on Protection of the Handicapped and Regulations Concerning
Work on Providing “Five Guarantees”. The laws stipulate that
in cities elderly widows ad widowers who are childless, helpless,
living alone, eligible handicapped persons and orphans shall
be supported and resided in special concentrated homes, while
a combination of concentrated and scattered forms shall apply
to those in the rural areas. Concentrated establishments include
social welfare homes, old-age homes, sanatoriums, and children’s
welfare homes. For handicapped persons, government aid efforts
include the formulation of preferential policies for establishing
social welfare enterprises of diverse types to help create job
opportunities for those who are able to work. |
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| The government has issued
the Military Service Law, the Regulations on Honoring Revolutionary
Martyrs, Regulations on Special Care and Treatment for Servicemen
and Regulations on the Resettlement of Ex-Servicemen in Cities
and Towns, compensating and commending the special group of
people who have rendered meritorious services to the nation
and the society. These regulations stipulate that a regular
and fixed-amount subsidy shall be given to the key recipients,
such as dependents of fallen servicemen, disabled servicemen
and demobbed veterans; the dependents of conscripts shall be
granted special allowances; the medical costs shall be reduced
or waived for disabled servicemen; the demobbed soldiers shall
enjoy a just-for-once job assignment from the government and
those who wish to find jobs on their own shall be given subsidy
in one lump sum and enjoy the preferential policy. |
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Mutual help among neighbors
is one of the Chinese traditional virtues. Issued in 2000, the
Law of the People’s Republic of China on Public Welfare Donations
institutionalizes and encourages regular donations for social
welfare. The Chinese government also encourages enterprises,
institutions and mass organizations to help the poor shake off
poverty and get rich in a systematic and organized manner. Governments
at the grassroots levels also operate community services for
the poor and needy.
The Chinese government attaches great importance to the construction
of social security system, regarding it as one of the important
pillars of socialist market economy, aiming at building a social
security system corresponding to the socialist market economy
and launching the pilot programs in some provinces. With the
healthy and sustained social and economic development, the social
security system in China will boost and improve vigorously.
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