Ladies and gentlemen,

I am delighted to attend this press conference convened by the State Council Information Office and meet Chinese and overseas journalists in this room. As the printouts have been distributed to you already, I would like to make a very brief introduction about the system.

At the beginning of 2004, the Chinese government decided to introduce the System of Social Support for Some Rural Families Practicing Family Planning (“social support system”). The General Office of the State Council forwarded the proposed program of the National Population and Family Planning Commission (NPFPC) and Ministry of Finance (MOF) on implementing the pilot project of the social support system (“Pilot Project of Social Support”). At the Central Working Symposium on Population, Resources and Environment convened in March 2004, President Hu Jintao and Premier Wen Jiabao made important instructions for the pilot project. Afterward, the Pilot Project of Social Support was initiated in the five provinces (municipality) of Sichuan, Yunan, Gansu, Qinghai and Chongqing as well as the 10 prefectures (cities at prefectural level) of Chengde, Jinzhong, Siping, Qiqiha’er, Yichun, Wuhu, Jiaozuo, Changde, Yichang and Zunyi. At the same time, the national government encouraged the eastern provinces to initiate local pilot with their own fund. In the state-designated and locally initiated pilot sites, this system has benefited the populations of 310,000 and 500,000 respectively, involving a total number of 1.8 million people in families that accepted family planning

Under the social support system, the government establishes a special fund from which financial support at the rate of at least RMB600 per person per annum is distributed to rural couples that have given birth to only one child or two girls in response to the government promotion of family planning and are at least 60 years old through their life-long period

Providing social support to some rural families practicing family planning is not only an important institutional scheme by the government for the purpose of improving and advancing the population and family planning programs in rural China, but also a significant reform and institutional innovation in China’s population and family planning program. Moreover, the social support system fully reflects the concern of the Party and the government for practical interests of the rural people. Hence, it is an example of good governance and benevolent administration that is embraced by the vast majority of rural people. While remarkably increasing the credibility and influence of government policies, the social support system is also conducive to effective solution of rural population problems and harmonious development of rural China. As such, the system is of extensive and far-reaching implications in terms of upgrading rural grass-roots governance, building closer relationship between the government and the masses, increasing the income of rural people, eradicating poverty and exploring for a rural social security system.

In order to ensure that funds for social support are distributed to rural couples in time and full amount, the pilot areas have explored the operational mechanism of “separating the four functions,” i.e., separating eligibility identification, fund management, fund distribution and public supervision from each other. The four functions give rise to the four components in the institutional operation, under which the population/family planning sector, the fiscal sector, the fund distribution agencies and the supervising bodies are interrelated/ mutually constrained, and respectively assume their responsibilities so as to form an institutional environment that features fairness, transparency as well as power conditioning. Thus, the Pilot Project of Social Support minimizes intermediaries, avoids monopoly by any one sector and eliminates “black case work.”

Under the institutional framework of “separating the four functions,” “an express channel” is built up by which government fund is directly distributed to rural couples as financial support. The MOF and provincial departments of public finance establish special accounts for concentrated management and closed operation of the funds for social support that are transferred from special fiscal accounts directly to entrusted distribution agencies with qualifications. The latter establish accounts for individual target recipients of social support according to the list of target recipients of such support after review, confirmation and public announcement at all relevant levels carry out special management of such individual accounts and distribute the funds to the target recipients through socialized channels. Last year, in the first group of pilot areas, a total of RMB210 million was distributed in full to over 310,000 target recipients of social support.

The social support system enjoys four features.
· It is a system that provides direct financial assistance to rural couples that accepted family planning with support from the government’s fiscal policy. In terms of fund sharing, the national and provincial public finance pay the majority with a very minor proportion assumed by county public finance. Local county governments in West China pay very little. This arrangement ensures that in most areas implementation of the social support program will not be affected by local fiscal difficulty.

· Compared with other social welfare schemes , the social support system focuses on encouraging rural couples to practice family planning and slowing down rural population growth in a more effective manner, hence of clear policy-orientation;

· The social support system makes full use of existing administrative resources and socialized distribution channels to identify eligibility of target recipients for support, manage and distribute funds, carry out social supervision. In another word, no additional establishments are resorted to. Neither the departments of public finance nor the population/family planning sector is involved in fund distribution. This practice not only saves operating cost of the project but also effectively ensures that funds for social support are not retained or abused at any level for any irregular purpose;

· The social support system is an institutional scheme for fundamental solution to rural population problems, and promoting coordinated population and socioeconomic development. It is a policy that will be in stable practice for a relative long time period rather than an expedient measure.

In 2004, the Pilot Project of Social Support achieved four distinctive results:

· First of all, pilot project integrates interest orientation with social constraints in population and family planning program. By motivating rural population to practice family planning, the project promotes the re-orientations of guiding philosophies and approaches for population and family planning program. In the first group of pilot provinces and municipalities (prefectures), there is a dramatic increase in the number of rural couples that voluntarily accept family planning methods.

· The pilot project has eased the difficulties that rural family-planning acceptors are facing in their economic production, life and old-age supporting, adds more humane concern to family planning work and builds closer relationship between government and the masses;

· The institutional framework of “separating the four functions” has given rise to a government work mechanism that features cooperation as well as power conditioning among all stakeholders, high efficiency, transparency and virtual interaction. This, in turn, has reinforced vitality and efficiency of grass-roots work and promotes grass-roots governance building in rural China.

· The pilot project has explored new philosophies in terms of addressing the “Three Dimensional Rural Issues” and developing social security systems in rural China.

On the basis of pilot project carried out in some areas in 2004, the central and local public finance will arrange in 2005 special funds of RMB400 million and RMB200 million respectively for expansion of the Pilot Project of Social Support. Added to the list of pilot areas designated by the central government will be most areas in the 23 provinces (autonomous regions and municipalities) of Hebei, Shanxi, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei, Hunan, Hainan, Inner Mongolia, Guangxi, Guizhou, Shaanxi, Ningxia, Xinjiang, Sichuan, Chongqing, Yunnan, Gansu, Qinghai, Liaoning and Fujian as well as 12 counties in Tibet Autonomous Region and 22 counties (cities at county level) in Shandong Province. In East China, provinces (municipalities) such as Beijing, Tianjin, Shanghai, Jiangsu, Zhejiang and Guangdong will finance pilot project by themselves. Thus, a total of 930,000 people will become target recipients in pilot areas designated by the central government. Together with the locally initiated pilot sites in East China, the total beneficiary population will reach 1.35 million.

Thank you very much for your attention. My colleagues and I would like to answer questions.