China will extend its social security coverage to include
private business employees and migrant workers among others,
according to a top official in charge of social security at a forum
held in Beijing over the weekend.
"Covering a large number of people is one of the social security
system's fundamental principals," said Tian Chengping, minister of
the Ministry of Labor and Social Security, at the first China
Social Security Forum. "Only broad coverage brings equality.
Therefore, our mission that social security should cover more
people is a priority," he said.
Under the new rules, the interests of migrant workers will be
safeguarded through work injury insurance amid government
pledges to provide pension schemes for them.
The government also aims to provide employment, training and
social security services to farmers who have lost their land.
However, such promises fall short of what is needed, according
to Khalid Malik, the United Nations' resident coordinator in China.
"China has made a good beginning to set up a social security
system," said Malik. "But the system needs to be extended to cover
rural areas."
Malik urged the authorities to pay attention to the impact that
an improved social security system will have on increased labor
mobility, saying social services should cater not only to migrant
workers, but also to the families they leave behind.
"The demand for reliable rural social security arrangements is
growing just as the active rural labor force that can contribute to
their financing is shrinking," he said.
Moreover, since women form a disproportionate majority in the
countryside, rural issues of social security must consider gender
issues as a priority.
The pension policy today, according to Malik, also faces
challenges from China's shifting demographics. A recent World Bank
paper indicated that the system dependency ratio, representing the
number of old people in employment, will increase rapidly over the
next few years.
The UN suggests China use its general budget to subsidize
pensions for the next group of retirees.
China's social insurance system now covers 6 percent more
Chinese annually than in recent years. By the end of 2005, the
total income of five social insurance funds for basic pension,
unemployment, employment injury, maternity and basic medical
insurance reached 696.8 billion yuan (US$87 billion), with an
annual income growth of 20 percent in recent years. The national
social security fund has added up to more than 200 billion yuan. By
last year there were 174.87 million old people and 106.48 million
who were jobless.
(China Daily September 25, 2006)