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)