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Rural Social Security System Vital to Nation's Development

The Ministry of Labour and Social Security has hammered out a plan for establishing a social security system in China's rural areas, according to the 21st Century Business Herald.

The plan has been submitted to the State Council for discussion, said the paper.

Although the ministry has not officially confirmed the news, it has been its priority to speed up the establishment of such a system. A high-ranking ministry official revealed in late January that it will push the programme in some of the country's rural areas.

China has emphasized the expansion of its urban social security network in recent years for all industrial workers. This has become an urgent task because as the State sector accelerates reform and restructuring, it creates a growing number of jobless people. The basic framework for the urban social security network was established in the 1990s.

Now that this is in place, there are signs that the central government is considering promoting the rural social security system.

As an experiment, the country has launched social security pilot programmes in some rural areas. By the end of 2003, more than 50 million people had joined the programme, which gave them a personal social security account totalling 30 billion yuan (US$3.61 billion). And more than 2.2 million farmers have started to enjoy pension benefits.

Currently, 10.92 per cent of China's rural population is over the age of 60, 1.24 percentage points higher than the urban level. According to the 21st Century Business Herald report, about 45 per cent of older rural people think their lifestyles are not guaranteed.

From a wider perspective, a comprehensive social security network in rural areas will contribute to a healthy national economy.

Without guarantees during old age, farmers tend to save money rather than spend it, which results in a stagnant rural market. For a long time, the sluggish rural market has exacerbated deflational pressures.

Providing social security for elderly farmers is the government's unshirkable responsibility if it wants to build China into an all-round well-off society.

In recent years, the establishment of the rural social security network has not made much headway. There used to be more than 80 million farmers -- 30 million more than the current number -- included in pilot programmes in the late 1990s across more than 2,000 counties.

It is time the State shifts its working priorities to stem the downward trend.

To implement the ministry plan, the State needs to put in 20 billion yuan (US$2.4 billion) annually in the coming two to three decades. The money would be earmarked for subsidizing farmers' social security payments because they do not have a stable cash income.

It is a big sum of money, but not unaffordable.

Last year, China's revenue increased by 500 billion yuan (US$60.2 billion). A small slice of this big cake is not hard to allocate, especially for the sake of such a strategically important cause.

Hopefully, in 20 or 30 years' time, Chinese farmers will enjoy the same social benefits as their urban peers.

(China Daily February 24, 2005)

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