II. Old-age Security System

China regards the establishment of an old-age security system corresponding to the level of the country's socio-economic development and ageing population as an important task and a priority area in its undertakings for the aged. In recent years, China has gradually established and improved an old-age security system involving the government, society in general, the family and individuals in its efforts to guarantee the basic life of elderly people.

Establishing an Old-age Insurance System in Urban Areas
In recent years, the Chinese government has gradually established a uniform basic old-age insurance system in urban areas that covers all the employees of different types of enterprises, persons engaged in individual businesses of industry or commerce, and people who are employed in a flexible manner. By the end of 2005, the number of people participating in the basic old-age insurance scheme across China had reached 175 million, 43.67 million of whom were retirees. The disbursement of the old-age insurance fund was 404 billion yuan. The state has also set up an adjustment mechanism of the basic pension, by which the state adjusts the level of the basic pension of enterprise retirees in light of price fluctuations and wage raises of enterprise employees. A retirement system for staff members of government agencies and public institutions has been established; these people get their pension either directly from the central government finances or from their former employers at the rate stipulated by the state.

The state raises funds for the basic old-age insurance through multiple channels so as to increase the fund reserve needed for the increasingly larger gray population and ensure that enterprises' employees get their basic pension in full and on time. The state has made greater efforts to ensure that payments are made to the funds for the basic old-age insurance. By the end of 2005, the balance of China's basic old-age insurance funds was 404.1 billion yuan, and the total payment to the funds that year was 431.2 billion yuan. The government has also increased its financial input into the fund. In 2005 some 65.1 billion yuan of the basic old-age insurance fund came from government finances at different levels. Besides, a nationwide social security fund has been established, and by the end of 2005 the accumulated total was 201 billion yuan.

The state is actively developing supplementary old-age insurance. It guides and helps enterprises with adequate capacity to set up annuities for employees. Both enterprises and employees pay toward the annuity, so that funds are accumulated and managed under individual accounts. By the end of 2005, a total of 24,000 enterprises all over China had set up enterprise annuities, with 9.24 million employees participating. The state also encourages the development of old-age insurance attached to personal savings deposits; and guarantees the livelihood of elderly people through multiple channels.

Probing the Establishment of an Old-age Security System in Rural Areas
About 60 percent of the elderly people in China live in rural areas. Based on the socio-economic development level in rural areas, the Chinese government emphasizes the role of the land and the family in providing for people advanced in age. It has begun to study the establishment of an old-age social security system in rural areas in order to guarantee the basic livelihood of the elderly people there.

Giving full play to the role of the land in ensuring elderly people's livelihood and protecting farmers', including the elderly people's, right to operate land contracted to them. The Law of the People's Republic of China on the Protection of the Rights and Interests of Elderly People stipulates that an elderly person's guardian is obligated to till the land contracted to the elderly person he/she supports, and also to tend forestry and livestock under the elderly person's charge. The revenue from these will go to the elderly person as a guaranteed source for his/her basic livelihood. The state encourages people to sign a "family support agreement," which stipulates how the elderly person is to be provided for and what level of livelihood he/she will have. Village (neighborhood) committees or other relevant organizations will supervise the implementation of the agreement in order to make sure that elderly people receive the support they are entitled to. At present, all families in rural areas are encouraged to sign a "family support agreement." By the end of 2005, some 13 million "family support agreements" had been signed.

Probing the establishment of an old-age social insurance system in rural areas. By the end of 2005, about 1,900 counties in 31 provinces, autonomous regions and municipalities under the central government had established their own old-age social insurance systems. More than 54 million farmers were involved, with the accumulated insurance funds reaching some 31 billion yuan. And more than three million farmers now receive pensions. The total disbursement of old-age insurance payments in 2005 was 2.13 billion yuan.

China actively develops social security systems of various forms, and priority is given to a special group of elderly people to be covered in the social security system in rural areas. These are elderly people who have lost the ability to work, who have no source of income, and who have no legal guardians whatsoever to support them, or their legal guardians do not have the ability to support them. They enjoy the state's "five guarantees" system, which means that their food, clothing, housing, medical care and burial expenses are taken care of and subsidized by the government.

At present, more than 4.6 million elderly people across the country are benefiting from this government policy. For rural couples who have followed the state family planning policy and given birth to only one child (or two daughters), when they turn 60 they receive a bonus from a special fund made available by the central and local governments. By the end of 2005, some 1.35 million people had received such a bonus.

The Chinese government pays attention to taking care of elderly farmers whose land has been requisitioned in the process of urbanization. By gradually including those farmers in the social security system, the government makes sure that their basic livelihood is permanently guaranteed. So far, 15 provinces, autonomous regions, and municipalities directly under the central government have drawn up social security policies regarding farmers whose land has been requisitioned. About six million farmers are now covered by social security schemes, and some 50 billion yuan has been raised for this purpose.

Establishing Aid System for Impoverished Elderly People
The Chinese government has included the alleviation and elimination of poverty among elderly people in its anti-poverty strategy and the plan for the development of undertakings for the aged. The state has established a system that guarantees a minimum standard of living for urban residents. Families with per-capita income lower than what is needed to ensure the minimum standard of living in their area are entitled to a special allowance according to the standard.

In 2005, some 22.33 million impoverished urban residents (including impoverished elderly people) received such allowances, including almost all the people eligible for receiving the minimum living allowance. In the rural areas, the state practices an aid system by which families in most straitened circumstances receive a fixed amount of aid regularly or other livelihood assistance when the need arises. In regions where conditions are appropriate, the state is actively probing the establishment of a system that guarantees the minimum standard of living for rural residents.

At present, 8.65 million rural residents have been designated as people in the most serious financial difficulties, and they receive fixed aid from the government regularly. Some 9.85 million rural residents are entitled to receive the minimum living allowance, including poor elderly people who do not meet the requirements of the "five guarantees" system. The state encourages areas with adequate capacity to build homes for the aged, grant old-age subsidies and, for those over the age of 80, a special allowance in order to improve the lives of elderly people.

Meanwhile, local governments are actively organizing "helping the poor through production" schemes. They are doing their best to help poor people in their 60s who are generally healthy and strong enough to work to engage in farming, aquaculture and processing business, so that they can support themselves. China should give full play to the role of all social sectors in helping poor elderly people, encouraging NGOs like the old-age foundations to be found all over the country, as well as enterprises, public institutions and individuals to provide charitable and other assistance.

Various other forms of assistance are officially encouraged, such as pairing up between a well-off family and a poor elderly person so that the former may give more help to the latter, making commitments to support poor elderly people, doing volunteer work for them or paying visits to convey greetings to them. Therefore, various types of assistance are provided to the poor elderly people.