IX-3 Question: China's effort to increase domestic demand over the past years seems to be unsuccessful, primarily due to the absence of a complete social safety net. What are the plans and timetable of China to build a social security system for all of its citizens?

A: The ultimate goal for China's reform and development is to satisfy the growing material and cultural demand of its people. At present, the most pressing is to establish and improve the basic social security system for pensions, medical care, education and housing of the general public.

Over the past years, the Chinese Government has made substantial efforts toward building a social safety net that covers both the urban and rural residents. Measures have been taken to guarantee the timely and full payment of the basic subsistence allowance for laid-off workers of state-owned enterprises and basic pensions for enterprise retirees, and push forward reforms of the insurance system. As a result, the social security coverage has been expanded and the country's social safety net capacity enhanced.

In the coming years, China will further promote and enhance the building of a social security system in the following aspects:

First, continuing to improve the current basic pension system that comprises social pension pools and individual retirement accounts to realize the shift of the pension system from the pay-as-you-go pattern to a partial funding pattern, and well managing the investment of pension funds, in order to prepare system and funding readiness for a peaking of the elderly population. At the same time, China encourages enterprises to establish annuity systems and promote the pension system reform in government agencies and public institutions.

Second, improving the current basic urban medical insurance system and its funding, operational and management mechanisms and gradually establishing a medical insurance system covering all urban residents.

Third, developing a social security system that integrates urban and rural areas. Measures will be taken to bring migrant workers into coverage of workplace injury insurance schemes, facilitate the progress to provide migrant workers with medical insurance for major illnesses, explore policies on pension systems for migrant workers, provide training and social security to farmers under land requisition and experiment the establishment of a social pension system for rural residents.

Fourth, China will also establish a social relief and assistance system that covers both the urban and rural areas and a minimum living standard security system for rural residents by 2010, in order to form a long-term mechanism securing the basic living standard of rural poor and improve the coverage and quality of social relief and assistance.

In this respect, China aims to establish a social security system that covers all residents both in urban and rural areas by the year 2020. That means in the coming 10-plus years, the coverage of China's pension, medical, unemployment and workplace injury insurance will be multiplied to form the largest social security system in the world.

(China.org.cn)