A Glimpse at China’s Social Security Programs

The National People’s Congress Standing Committee reviewed the State Council’s Report on the Promotion of Small and Medium-Sized Enterprises, measures for creating employment, and rural social insurance today, reports China National Radio (CNR). According to a report given by Li Yizhong (李毅中), minister of Industry and Information Technology, small and medium-sized enterprises (SMEs) that finished products and service value accounted for 60 per cent of China’s GDP, and for almost 80 per cent of jobs in cities and townships. The NPC Agriculture and Rural Affairs Committee’s vice chairman Sun Wensheng (孙文盛) explained on the same meeting that generally, the level of social security in rural areas remained low, and some were merely in their experimental phase. The agricultural affairs committee suggested that appropriate adjustments to the arrangement of social insurance testing work and its acceleraton should be made, that a stable funding mechanism for rural social security should be established, and that in accordance with city and countryside overall planning, systems of  rural social security systems should be strengthened, and that this policy which benefitted the countryside should be effectively implemented.

According to China Radio International (CRI English), the State Council report says that 320 counties, or 11.6 percent of the country’s total, had been or would be approved to try a new rural social pension insurance system, which would benefit more than 15 million rural residents.

Social security in rural China usually means that the government will subsidize individuals’ insurance premiums. According to an article by Katie Lewis in the Canadian Medical Association Journal of June this year, such subsidies will amount to some 15 Yuan RMB per person, per year. This would provide 90% of China’s population with some sort of health insurance. But that will hardly put low-income families (by Chinese standards) into the position of buying social insurance. Despite central insurance programs, China seems to be a patchwork of different local  approaches and solutions to the problem. Depending on individual incomes and the treatment that is needed, social security is still looking unaffordable for many.

850 billion yuan will be allocated for medical and healthcare reforms over the next three years, according to a Brookings commentary of April this year. This would amount to some 283 billion Yuan for 2009, if equally allocated over the budgets of three years including 2009. This would be  4.28 per cent of China’s projected 6.623 trillion total national revenue of 2009, or 3.74 per cent of its 7.6 trillion budget (including a 950 billion deficit) as projected in March this year.

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