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China Strengthens Supervision of Social Security Funds
In China the social security system is playing an increasingly important role in people’s lives. Now more than 100 million city dwellers have endowment insurance, and more than 30 million people are receiving old-age pensions. However, this system is not problem-free, in particular, there is some illegal use of social security funds. To crack down on such activities, the Chinese government has demanded stricter supervision of them.

The call for stricter supervision of social security funds comes because there have been illegal operations in the management of these funds. Some of the funds are provided by government, others come from payments by companies and individuals. However, some fund managers conceal the true volume of their funds, fail to pay the premiums to insurance companies, or, as a form of bribe, perhaps, even pay the premiums for those who do not deserve them.

Sun Jianyong is from the Ministry of Labor and Social Security.

“The supervision is of two kinds. One is the on the spot, while the other one is done using the financial records, and through a computer network auditors can analyze the data and see if the funds are being managed properly. If problems appear, then they can go to the fund management office for on-the-spot investigation and supervision.”

To better carry out this task, Sun Jianyong explains that different parties work together in the supervisory process.

“Separate actions by different parties may lead to “black-box” operations. Supervision should be transparent and open, so the individuals responsible are not allowed to keep what they have done and seen to themselves.”

China’s social security system is an important tool to protect people’s basic living rights. It includes programs for endowment insurance, unemployment insurance and minimum living expenses.

This system has proved very successful as part of the reform of state-owned enterprises and maintaining social stability. Sun Jianyong says stricter supervision of social security funds will ensure better protection of the interest of Chinese citizens.

( CRI August 1, 2002)

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