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’s traditional 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 Rural Areas

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 the actual 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 was in 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 meeting the 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; and those who have no source of income. To take care of elderly people in the “five guarantees” category who cannot look after themselves alone, 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 for sick 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.