Source: The People's Daily

Since the 18th National Congress of the CPC, the Central Committee of the CPC with comrade Xi Jinping at the core has deepened reform in an all-around way. In such a context, China's social security reform has made great achievements. The social security system has been further improved. A "four girders and eight columns" -type main framework has been basically established, and several new social security policies have added momentum to the structural reform at the supply side. China’s social security system has effectively safeguarded people's livelihood, increased benefits for the people, maintained social justice, and making great contributions for maintaining steady growth, promoting reform, and ensuring people's livelihood.

A “four girders and eight columns” -type main framework has been basically established in China’s social security system. Over the past 5 years, China’s social security system reform has made great achievements: dozens of reform policies have been rolled out in succession and obvious effect has been achieved from their implementation; significant achievements have been made in the reform of some key areas and key links, and the "four girders and eight columns" –type main framework of the social security system has been established. The system design for reform of endowment insurance in government organs and institutions has been basically completed, and the endowment insurance systems for urban and rural citizens have been successfully integrated. The enterprise annuity system is continuously improved, and an occupational pension system is under construction. Pilot of tax-deferred personal commercial endowment insurance system is accelerated. A multi-level endowment insurance system with the basic endowment insurance as the base, and includes enterprise annuity, occupational pension and commercial insurance is being rapidly established. The basic medical insurance for urban citizens and the new type of rural cooperative medical insurance have been comprehensively integrated. Intercity settlement and transfer and continuity of medical insurance is being steadily pushed forward and pilot of long-term care insurance is being conducted in 15 cities. Summarization of the experiences and system design are being conducted simultaneously and an investment system of the social security fund has been basically established.

New social security policies fuel structural reform at the supply side. Implementation of the policies has stabilized work force and the society, effectively supporting adjustment of industrial structure and upgrade of economic transformation. In the current situation that the downward pressure on the economy is increasing, and enterprises are facing high pressure from transformation and upgrade, and the risk of unemployment of workers is increasing, several major adjustments have been made to the social security policies, which play a relatively big role in the structural reform at the supply side. In 2015, the State Council decided in succession to appropriately reduce the premium rate of unemployment insurance, occupational injury insurance and maternity insurance. In April 2016, the State Council decided to reduce the premium rate of basic endowment insurance and unemployment insurance for enterprise employees for a temporary period. According to incomplete statistics, the reduced amount of social insurance premium has exceeded RMB 123 billion, accounting for about 10% of the total reduced amount of enterprises’ tax burden. In addition, subsidies have been set aside in the unemployment insurance fund to support enterprises to stabilize jobs, a move which has raised enterprises' motivation to fulfill their social responsibility to stabilize jobs. According to incomplete statistics, in 2015 and 2016 alone, 540,000 enterprises have received RMB36.4 billion of job stabilizing subsidy, benefiting 65.61 million employees. These new security policies that are designed to adapt to the new normal of economic development, that reduce the burden on enterprises and improve the fund's use efficiency, are very helpful for the completion of the five tasks of "cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening areas of weakness" of the structural reform at the supply side.

With expanded coverage and increase of the benefit level, China’s social security system provides strong guarantee for people's livelihood. Over the past 5 years, the coverage of China's social security system has been continuously expanded. By the end of 2016, the number of people covered by basic endowment insurance, unemployment insurance, occupational injury insurance, or maternity insurance had reached 888 million, 181 million, 219 million and 185 million respectively, which represents an increase of 99.8 million, 28.64 million, 28.79 million and 30.22 million respectively over the numbers at the end of 2012. The basic medical insurance presently covers over 1.3 billion people, which represents a nation-wide coverage. China's achievement in expanding the coverage of social security has won high recognition in the international society. In November 2016, the International Social Security Association awarded the Chinese government "Outstanding Achievement Award in Social Security". The social security benefit level in China has been rising constantly. The monthly basic pension for retirees from enterprises across China has been raised from RMB 1686 in 2012 to RMB 2362 in 2016, which represents an annual growth of 8.8%. In 2017, China continues to raise retirees’ pension at an average rate of 5.5%. The minimum standard of the basic pension for urban and rural citizens was raised to RMB 70/month from RMB 55/month. The unemployment insurance has been raised by an average annual rate of 11.3%, and the maternity insurance has been raised by an average annual rate of 8.1%. The benefit level of medical insurance has been raised significantly. In 2016, the maximum disbursement limit of medical insurance for employees and the medical insurance for urban and rural citizens was 6 times local employees' average wage and local citizens’ average disposable income respectively, and within the policy coverage, the rate of disbursement from the insurance fund for hospitalization expenses reach about 80% and 70% respectively. The subsidy for basic medical insurance of urban citizens rose from RMB 240 in 2012 to RMB 420 in 2016. The number of people covered by the critical illness insurance for urban and rural citizens has exceeded 1 billion people, and the disbursement rate as stipulated by policy is no lower than 50%. With expanding of coverage and raising of the benefit level, China’s social security system has effectively safeguarded people's livelihood, increased people's welfare, and safeguarded social justice.

(The author is Director of the Modern Charity Research Center of Shanghai Academy, and Director of the Institute of American Studies, CASS)