Under the planned economy, the Chinese government took care of old-age pension, medical service and other welfare of all civil servants, and staff and workers of enterprises and institutions. If one was employed by a state enterprise or institution, he would be taken care of all his life, although it was a low-level security system. As China has entered an aging society, the number of retirees is increasing, and some enterprises have more retirees than people on their pay-roll, resulting in great burdens and troubles to the enterprises. Since the 1990s, China has actively promoted the reform of the old-age, unemployment and medical insurance systems; and the State Council has promulgated the Regulations on Unemployment Insurance, the Interim Regulations on the Collection of Social Insurance Premium, and the Regulations on Guaranteeing Urban Residents’ Minimum Standard of Living, providing legal guarantee for the implementation of the social security system. Now a social security system integrating old-age, unemployment and medical insurance has taken initial shape, which is separated from enterprises and institutions and managed by social forces.
—Old-age Insurance. The coverage of basic old-age insurance has constantly expanded from state-owned enterprises and collectively owned enterprises to enterprises of various types and institutions administered along the lines of an enterprise. The security rights and interests of employees at non-state enterprises are also guaranteed. At the end of 2001, a total of 108.02 million staff members and workers, and 33.81 million retirees in China had participated in the basic old-age cooperative insurance program.
—Medical Insurance. The basic medical insurance has covered various kinds of enterprises and institutions, and state organs and social organizations in cities and towns, being one of the social insurance systems with the widest coverage. By the end of 2001, 76.29 million employees and retirees had participated in basic medical insurance.
—Unemployment Insurance. With a large population, China has great employment pressure. To alleviate the employment problem, starting from 1993 the Chinese government has carried out the labor market policy, opening various channels for employment. In view of the fact that staff members and workers in state-owned enterprises have been laid off in the past few years during the readjustment of the industrial structure, the Chinese government has implemented a re-employment project. At the end of 2001 the number of employees in the urban areas reached 239.40 million; 2.27 million people were re-employed through various channels in the year; and the unemployment rate in the urban areas was 3.6 percent. Various institutions adopted the unemployment insurance system, promoting the rational flow of workers and the formation of a unified labor market. By the end of 2001, a total of 103.55 million people had participated in the unemployment insurance program, and there had been 3.12 million people drawing unemployment insurance money.