Transcript social security ceiling in 2003

China’s Social Security System and
its Reform
（EMA）
Prof. Dr, Chun Ding,
Fudan University
2016-2017
H5301
• Basic knowledge
• Overview of China’s social security system
• Reform of China’s social security system
• Problem, challenges and prospects
Part 0.
Basic Knowledge
Part 1.Basics of China
•
•
•
•
Total land area : 9.6 million sq. km
Total sea area : 4.73 million sq. km
Rank 3rd in the world , roughly equal with the United States
Terrain descending from west to east
Topographic map of China
Heihe
Area: 43%
Population: 94%
GDP: 96%
Meters
Tengchong
Mountains : 33%
Plateaus : 26%
Basins : 19%
Plains : 12%
Hills : 10%
Percentage of Different Topography of China
Plains
12%
Basins
19%
Hills
10%
Mountains
33%
Plateaus
26%
Source: National Bureau of Statistics: China Statistical Yearbook 2010
Natural Resources
Reserves of many natural resources of China are ranked among
the largest in the world. Due to a large population the per capita
average share of natural resources are relatively low
•Land resources
•
•
•
•
•
Cultivated Land : 13%
Forests 20%
Water area in land 2%
Grassland 42%
Others 23%
•Mineral resources:
• Total value of proven mineral resources: rank 3rd in the world
• Per capita: less than ½ of the world average
•Water resources:
• Per capita: ¼ of the world average
• Almost half of 670 cities in China are facing the problem of water
shortage
Demographic Situation
• Population:1.37 bill. (Nov. 1st, 2010)
•
•
•
•
•
•
•
•
•
Mainland:1.33 bill.
Hong Kong: 7 mill.
Macau: 0.55 mill.
Taiwan:23 mill.
Population growth rate: 0.57%
Birth rate: 13.14 births/1,000 population
Death rate: 6.94 deaths/1,000 population
Net migration rate: -0.4 migrant(s)/1,000 population
Age & Gender structure (Mainland):
•
•
•
•
0-14 years: 16.6%
15-59 years: 70.14%
60years and over: 13.26%
Male/Female: 105.2:100
China’s population pyramid
Administrative divisions
• 23 provinces :
• Anhui, Fujian, Gansu, Guangdong, Guizhou, Hainan, Hebei,
Heilongjiang, Henan, Hubei, Hunan, Jiangsu, Jiangxi, Jilin, Liaoning,
Qinghai, Shaanxi, Shandong, Shanxi, Sichuan, Taiwan, Yunnan,
Zhejiang
• 5 autonomous regions
• Guangxi, Nei Mongol, Ningxia, Xinjiang, Xizang (Tibet)
• 4 municipalities
• Beijing, Chongqing, Shanghai, Tianjin
• 2 special administrative regions
• Hong Kong and Macau
Financing,
coverage,
benefits
Empty individual
account problem
Generation
contract
PAYG
PAYE
Social dumping,
Ageing society
Related Basic
knowledge
Social
Contribution
Beveredge and
Bismarck Model
Three –pillar-model
Replacement
Rate
Individual
saving
Account
Economic Developments since the Reform and Opening Up
• 2nd biggest economy in the world (2011)
• GDP: 7.3 trillion U.S. dollars
• 50 times of its GDP in the year 1978
• Share of Chinese GDP in the World(1978-2011):
• 1.8% - 10.4%
• Average annual Growth rate of GDP (1978 -2011)
• About 9.97%
Source: World Databank of World Bank
China's GDP (1978-2011)
50000
47156.4
45000
39798.3
40000
Billion RMB
35000
30000
25000
20000
15000
10000
5000
0
364.52
Source: National Bureau of Statistics: China Statistical Yearbook
Four significant Changes
• Marketlization: Economic transformation from central-planned system to
market-oriented system has been largely completed
• Globalization: China’s economy has been converted from isolated structure in
the past to the opening system at present
• Share of Chinese Foreign Trade in the world ( 0.79%-export & import,1978; 10.4%-
export,9.5%-import,2011) Export volume rank 1ST, Import volume rank 2nd, (2011)
• T
• Urbanization: The pace of urbanization has been tremendously accelerated
• 51.3% ratio of Urbanization,2011 (from 17.9% in 1978)
• Industrialization: The process of industrialization speeded up
• (Primary: Secondary: Tertiary in total GDP)28.2:47.9:23.9% - 10.2:46.8:43% (1978 –
2010)
Great improvement of Chinese people's living standard
• Ranking of China in terms of GNI per capita
• Rank 175 in 188 (1978) Rank 115 in 214 (2011)
• Per capita income
• Disposable income of urban residents: 8.95 times (1978-2009)
• Net income of rural residents: 8.61 times (1978-2009)
• Engel's Coefficient:
• 57.5% reduced to 36.3% (1978-2011) urban residents
• 67.7% reduced to 40.4% (1978-2011) rural residents
• Life-expectancy on average
• 68 years - 73.5 years(1981-2011)
• Average years of education
• 8.64 years
Source: National Bureau of Statistics: China Statistical Yearbook
Growth of wages
• Wages on average in 2011:
• Private Sector: 24556 RMB, growth
rate: 18.3%
• Non-private Sector: 42452 RMB,
growth rate: 14,3%
• Changes of Standards for
minimum wages:
• 25 provinces has adjust the
standard for minimum wages, the
average growth rate of which
reached 22％
• The highest standard for minimum
monthly wage: 1320RMB, in
Shenzhen
• The highest standard for minimum
hourly wage: 13 RMB, in Beijing
Problems faced by China’s Economy
• Problems in long-term
• Uneven benefit distribution, widened wealth gap
• Excessive resources consumption, Deteriorating environment
• Unsustainable economic growth-model
Uneven benefit distribution, widened wealth gap
• Imbalanced distribution of income and benefits
• Gini Coefficient 0.24 - about 0.48 (1984 – 2008)
• Gaps of income per capita between urban & rural：
• Urban v.s. Rural 2.57 times (1978)， 3.22 times(2005)
• Gaps of income between rich & poor households：
• 10% of households with highest-income v.s. 10% of households with lowest-income
8.63 times (2009 in urban)
• Gaps between different regions:
• In 2009, the ratio of GDP per capita :Zhejiang (coastal province) : Gansu (barren
hinterland Province) 3.45 times
• Social instability has been gradually built up ：
• nearly 90,000 collective upheavals in 2009
•
Excessive resources consumption,Deteriorating environment
Created 8%GDP of the world. Consumed: energy 18%，steel
44%，cement 53% of the world (2009)
• Land desertification:
Desertification
governance
Unsustainable Growth-model
30 years rapid growth of China’s economy was mainly driven by
investment and export
•Decreased efficiency of government investment
•High dependency on foreign trade (Imp.&Exp./GDP)
• Rate:59.2% (2008), 12.5% ( 1980).
• Increased trade friction, trade protectionism
•Pressure on RMB appreciation
• Trade surplus: US$18.3 bill. (2010)
• Exchange rate of RMB: USD: 25% appreciated (2005 till now)
Solution
• Upgrading!?
• There are a lot of difficulties in industrial upgrading
• Low end of the industrial chain
• Low private consumption
• Imperfect social security system
• Less-qualified labor force
• Education, R&D
• The danger from mass-unemployment
• Urbanization is a feasible solution
Part I.
Overview of China’s
Social Security System
Structure of China’s social security system
Social Insurance
Social Welfare
Special Care & Placement
Social Relief
Housing Security
Social Security
in Rural Areas
•Old-age Insurance
•Medical Insurance
•Unemployment Insurance
•Insurance for Work-related Injuries
•Maternity Insurance
•social welfare homes
•old-age homes
•sanatoriums
•children’s welfare homes
•the Minimum Living Standard security system
for Urban Residents
•Natural Disaster Relief
•Relief for Urban Vagrants & Beggars
•Social Mutual Help
•Rural pension Insurance System
•Rural Cooperative Medical Service
•The Minimum Living Standard security system
for rural Residents
• Evolution Process of China’s Social Security System
• 3 Stages:
• 1949 -- 1978: traditional social security System in the Central-planned
Economic System
• 1978 -- 2002: Pioneering Experiments and Reform under Transition
from Central-planned Economy to Market-oriented Economy
• From 2003 -- now: promotion for establishment of an unified
nationwide social security system with universal coverage
Institutional Arrangements of traditional Medical Insurance System
Urban Area
Rural Area
Scheme
Government
Insurance
Scheme (GIS)
Labor Insurance
Scheme (LIS)
Rural Cooperative
medical scheme
(RCMS)
Financing
Governmental
financial
agencies at all
levels
Enterprise welfare
fund
Collective investment,
joint investment by
collectives and
individuals, and
individual investment
Eligibility /
Beneficiaries
Working staff
members of
non-profit
institutions,
students and
retirees
Working staff
members of stateowned and
collective owned
enterprises, and
their spouses,
retirees
97% Peasants joined
voluntarily
Achievement and Defects of HCS in Central-Planned Economic System
• Began in the early 1950s
• Achievements
• 1. Elementary Health Insurance System (80-85% in mid 1970s)
• 2. Elementary Health care delivery system (non-profit, prevention before treatment)
• 3. Epidemic prevention service (e.g. extermination of smallpox in 1960, 10 years earlier
than its in the whole world)
• 4. Medical Resources, 2% of the world
•
Securing the Health of 22% of the world population
The infant fatality rate, 200‰ 1949 --33.2‰ 2004
the incidence of acute epidemics,
20,000/100,000 early 1950s ---- 194.8/ 100,000 late 1990s
• life expectancy
35 years 1949-------- 68 years 1981
•
•
Part II
Reform of China’s Social
security system
Factors led to the reform
•Economic reform go ahead!
•Decline of coverage rate
some former ensured employees in SOE switched their jobs to the private
enterprises ,joint ventures, farmers etc., lost safety net
•Funding problem by economic Transition
government and SOE were unable to fully finance the system like before
•Obstruction on free mobility of labor force and fair competition of enterprises
different ownership
separate social security system and different burden of different enterprises
•Ageing problem
Ageing society since 1999,(11% above 60)
Calculated at the price level of 1998, the medical expense will be increased by
26.4% due to the acceleration of aging of population.
•Great Demand for social security system from rapid economic growth and
condition for sustainable economic growth
Great Demand occurs from general Public for a reasonable and efficient social
security system due to institutional Transformation, Economic Growth, and Wealth
Accumulation
Process of Reform and Reconstruction
Time
Content
1984
Pension insurance system
1986
urban unemployment insurance system
1994
maternity insurance system
1996
employment injury insurance system
1998
Housing security system
1998
medical insurance system reforms for urban employees
1999
the Minimum Living Standard Security System
2003
New Rural Cooperative Medical Insurance
2007
Rural Minimum Living Standard Security program
2007
Urban Residents Basic Medical Insurance
2009
New Medical Insurance system
2009
New Rural Old-age Insurance System
2011
Social Insurance Law of the P.R.C.
2011
New Urban Social Old-age Insurance System
2013
Critical illness insurance for urban and rural residents
2014
Rural and urban old-age insurance schemes emerged into one
2016
the integration of urban and rural residents basic medical insurance
• Old-age Insurance
• Old-age insurance for urban employees
• Old-age insurance for urban residents
• New old-age insurance for rural residents
• Medical Insurance
• Employees medical insurance
• Medical insurance for urban residents
• New cooperative medical insurance for rural residents
• Critical illness insurance for urban and rural residents
• the integration of urban and rural residents basic medical
insurance
• Unemployment Insurance
• Insurance for Work-related Injuries
• Maternity Insurance
Ageing Population in China
•
•
•
•
1999 Ageing society
Average Life expectancy ,72(a)
，
70(m)、74(f)。
Three phases
2001—2020 ageing society
2021—2050 speeding up
2051—2100 stable。
China’s population pyramid
Demographic structure
1953
1964
1982
1990
%
2000
2005
2010
0-14
36.27 40.30 33.59 27.69 22.90 20.77 16.60
15-59
56.4
52.67 58.77 63.74 66.64 68.70 61.27
60 and over
7.32
6.07
7.63
7.63
65 and over
4.41
3.53
4.91
5.57
Source: China Statistics Yearbook
10.46 11.03 13.26
7.10
7.69
8.87
• Demographic Structure in Forecast (%)
2000
2010
2020
2030
2040
2050
0-14
24.84
20.25
18.83
17.17
16.21
16.09
15-59
65.07
67.49
64.34
59.23
56.22
53.93
60 and over
10.10
12.26
16.83
23.60
27.57
29.95
80 and over
0.89
1.33
1.85
2.71
4.43
7.00
100 and over
0.009
0.002
0.0045
0.0092
0.0172
0.0338
Aging Problem
year
Workers’ population to retirees’
1978
30：1
1983
10：1
1990
6：1
2025
3：1
Institutional arrangement of old age insurance system
for urban employees
Financing
Employer
Pension Payments
Social Pooling
Fund
20% of average
monthly wage
Private Saving
Account
1/120(139)
accumulation in
individual accounts
20%
Employee
8%
Institutional Arrangement of urban Health Care Reform 1998
Reimbursement
Financing
Self
payment
6%*70%
Employer
6%
Social Pooling
Fund
+
Self
payment
Co-pay/Co-insurance
4.2%
6%*30%
Employee
2%
Ceiling (4 (6)times of
annual average salary
of local working staff
members)
Private Saving
Account
3.8%
+
Out of
Pocket
Deductible (10%
of annual
average salary of
local working
staff members)
Institutional Arrangement of Rural Health Care Reform 2003
New Rural Cooperative Medical Insurance since 2003
Financing
Central
Government
Local
Government
10(20) yuan
10(20) yuan
10 yuan
Peasant each
Beneficiary
Cooperative
Health
Care
Fund
Catastrophic
Disease
Insurance
Failure of Urban Health Care Reform 1998
1.
Rapid Increase of Health Expenditure (HE)
1. Annual growth rate of HE: 15-22% vs. annual growth rate of GDP:9.8%
2.
Increasing Proportion of out-of-pocket payment: 20%-52% (1980-2005)
VS. Decreasing governmental input: 37%-17%
2.
Inequality
1. Low Health Care Coverage
<50% for urban,90%for rural
2. rare Access to Health Care Services
3.
Unreasonable and inefficient allocation of related resources
1. Unreasonable Input of Health Resources (urban 65.1%;rural 34.9%)
2.
Big gap between different regions (10.3 Beijing: 2.7 Yunnan doctors per
1000)
3.
Dual structure: urban areas vs. rural areas
(urban 6.5 : 0.8 rural beds per 1000)
Rapid increase of health care expenditure
（1978-2005）
NHE per capita
NHE as % of GDP
700
6
600
5
500
3
300
2
200
1
100
0
0
19
78
19
79
19
80
19
81
19
82
19
83
19
84
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
%
400
Source: Health Statistic Yearbook. The statistic method of GDP in 2004 and 2005 was different.
Yuan
4
Urban Health Care Coverage
30.4%
50.4%
4.0%
4.6%
5.6%
Social Medical Insurance（including BMI)
Government Insurance Scheme
Labor Insurance Scheme
Commercial Insurance
Without any Insurance
Source: The Report on the 3rd National Health Service investigation and analysis
Reasons to the Failure of urban Health Care Reform 1998
1.The Counter-Compelling Mechanism Brought by Economy Reform on Health Care
Reform
Economy reform-weakened gov. finance, shrinking of coverage , collapse of
traditional Rural Cooperative Medical Scheme …
2.
Weakened Role of Government in Health Care, especially Its Excessive BurdenShifting and Inadequate Functional Operation of Governmental Financial
Agencies
governmental( 32.16%-17.9%), (1978-2005)
individuals (20.43%-52.2%) (1978-2005)
3. Lack of Real Market-Oriented Reform in Health Care Delivery System, and Lack of
Parallel Coordinated Reforms on such Three Aspects of Health Care, Medical
Insurance, Pharmaceuticals
The market-oriented reform of health care expenditure is checked by the
bottleneck of central-planned medical service income.
Health Expenditure of China (1980-2005)
Year
1980
1985
1990
1995
2000
2004
2005
Total Expenditure of Health
Care 100 million yuan
143.2
279
747.4
2155.1
4586.6
7590.3
8659.9
Health Care Expenditure Paid by
Government%
36.2
38.6
25.1
18
15.5
17
17.9
Health Care Expenditure Paid by
Social Pooling%
42.6
33
39.2
35.6
25.6
29.3
29.9
Health Care Expenditure Paid by
Individuals%
21.2
28.5
35.7
46.4
59
53.6
52.2
Average Health Care
Expenditure Per Capita (yuan)
14.5
26.4
65.4
177.9
361.9
583.9
662.3
The Proportion of Total Medical
Expenditure to GDP%
3.17
3.11
4.01
3.69
5.13
5.55
4.73
Source: China Statistics 2006
Comparison between China and Some of Countries of the World on
Major Indexes of Health Care Expenditures （%）
Expenditure
of Health
care/GDP
Public Health Care
Expenditure/Total
Expenditure on
Health Care
Public Health Care
Expenditure/Gover
nmental
Expenditure
Medical Insurance
Expenditure/Pubic
Expenditure
1997
2003
1997
2003
1997
2003
1997
2003
China
4.2
5.6
39.4
36.2
13.6
9.7
87
53.4
Argentina
8
8.9
55.2
48.6
20.1
14.7
60.2
56.8
Brazil
6.5
7.6
40.3
45.3
9.7
10.3
0
0
India
5.5
4.8
15.3
24.8
4.7
3.9
0
4.2
France
9.4
10.1
76.1
76.3
13.5
14.2
96.8
96.7
Germany
10.5
11.1
76.6
78.2
16.7
17.6
90.7
87.4
Japan
7.4
7.9
79.5
81
16.5
16.8
89
80.5
Britain
6.7
8
83.7
85.7
13.7
15.8
11.6
0
U.S.
13
15.2
45.5
44.6
17.3
18.5
31.9
28.4
Source: World Health Statistics 2006, WHO.
Decreasing share of govt. exp. and
increasing share of out-of-pocket
% of total health expenditure
70
Govt. Exp.
60
Soc. Exp.
50
52.2
Out-of-Pocket
40
30
29.9
20
17.9
10
0
1980
1990
1995
2000
2002
2003
Source: Health Statistic Yearbook, 2006
2004
2005
Healthcare System
Financing
Drugs &
Equipment
Health
Personnel
Healthcare
Delivery
Management &
Regulation
Debates on Choices of Models of Health Care System
• Reason to the failure:
Market Failure or Government Failure?
• Which model can we choose?
Beveridge? Bismarck? American ?
new Concept of recent health care Reform
•
by 2020 a fundamental health care system covering the whole
population of China will have been established in our country.
• A fundamental national medicine registration system will be roughly
established,
• Strengthen a health service system on a basic level
• Promote the basic public health service gradually toward
equalization.
• Advance the public hospital pilot reform.
Time line of China’s healthcare reform
t
Text
2003
2006
2007
2009
Institutional Arrangement of
Health Care Reform 2009
•
Promote the basic public health service gradually toward equalization
(1) The schemes of basic public health services cover all the rural and
urban residents.
(2) An official list of categories of basic public health services
established.
10 categories of basic public health services provided to all residents
free of charge.
More than 81 million people over age 65 had health checks
(3) Constructed a nationally unified system of archives of the health
conditions of residents.
Over 50% Chinese health information are recorded in this system at
the end of 2011
(4) All the financial resources used to guarantee the public health
services provided by government through its budget.
Per capita allowance to basic public health services : 15 yuan in 2009,
25 yuan in 2011
New Rural Co-operative medical system
In October 2002, China clearly put forward that the governments
should guide farmers to establish a new type of rural cooperative
medical care system.
In January 2003, China explicitly put forward that the system
should be organized, guided and supported by the government.
And it should be participated voluntarily by rural residents. It will
be a system which needs the individual, collective and government
multilateral capital.
New Rural Co-operative medical system
In 2009, China made important strategic deployment which means
that we will deepen reform of the medical and health system. And
meanwhile, we made sure that the New Rural Co-operative medical
system will be the rural basic medical security system.
In 2015, the Health development planning commission and the
ministry of finance made the decision that per capita subsidies
standards of the system should increase 60 yuan from the basis in 2014,
reaching 380 yuan.
The problems in New Rural Co-operative
medical system
• Many people are working outside and don’t have urban health
insurance, so they are only in the New Rural Co-operative medical
system. But the problem is, they should join in the system in the place
of their domicile. They can’t do that in the place where they live. It is
very inconvenient.
• Most of the costs in terms of reimbursement are outpatient expenses.
Hence, the participants cannot submit an expense account in
residence, even in the place of domicile. And for the hospitalization
expenses, if it is not a big number, it will not worth going back to get
the money.
• The system may also enlarge the gap between the rich and the poor.
For poor families, even part of the expenses can be afforded by the
government, they still can’t pay the surplus. But things are different for
the rich families. This provides them with the real benefits.
China’s Healthcare Reform
• Chinese President Hu Jintao
Political Bureau of the Central Comm
Oct 23, 2006
• “The goal is for everyone to enjoy basic health care
services”
• Government has responsibility to build a safe,
effective, convenient and inexpensive
health care network covering both
urban and rural residents
China’s Healthcare Reform
Party secretary xi Jinping hosted Central Leading
Group for Comprehensively Deepening Reforms ’s 19th
meeting on December 9th,2015. And in the meeting, he
put forward that we should integrate urban residents basic
medical insurance and the new rural co-operative medical
system, and make the establishment of a unified basic
medical insurance system for urban and rural residents.
The State Council issued the documents about the
integration of urban and rural residents basic medical
insurance on January 3rd ,2016.
The integration of urban and rural residents
basic medical insurance
•
Integration of basic system policy
1. Unified coverage
2. Unified financing policy
3. Unified security treatment
4. Unified health insurance directory
5. Unified fixed point management
6. Unified fund management
Critical illness insurance program since 2012
China in 2012 announced a decision to expand the
coverage of the country's healthcare insurance system to
include the treatment of critical illnesses, aiming to
prevent patients from being reduced to poverty by
necessary healthcare costs.
The critical illness insurance means that people can
submit an expense account again after they get reimbursed
on the basis of the medical insurance. It should be no less
than 50%.
Official Registered Unemployment(1978-2010)
10
9.08
9
8
7
6
5
4.1
4
3
2
1
0
Official Registered Unemployment Rate(%)
Official Registered Unemployment Workers(million)
Source: Labor and Social Security Yearbook
Three Unemployment Peak in China
Unemployment Peak 1
—1979-1980
Educated youth been sent
to rural areas (zhiqing)
15 million, by 1979
returned to urban area
Unemployment Peak 2
—the end of 1990s
SOEs Reform
laid-off worker
more than 21 million,
From 1999 to 2005
Unemployment Peak 3
—2002-present
urbanization process,
College enrollment
increased dramatically
200 million migrants,
1.05 m,1998---6.7m,2011
Unemployment Insurance
• Requirements for applying for unemployment pension:
• (1) participate in the unemployment insurance program
keep paying premium more than one year;
• (2) out of work unwillingly;
• (3)fill in unemployment registration,
been looking for job actively
Unemployment
Insurance Premium
enterprises
and institutions
employees
2%
of total wage bill
1%
of personal wages
Work-related injury Insurance
• Premium (% of the total wage bill of the employers)
•
•
•
Low level risk industry (0.5%),
Medium level risk industry (1%),
High level risk industry (2%)
• Benefits
•
•
•
•
•
•
Work-related Injury Medical Treatment
Work-related Injury Allowance
Disability Allowance
Lump-sum Disability Subsidy
Dependents Benefits
Lump-sum Death Subsidy
Work Injury Insurance
Contributors at Year-end
(1 million persons)
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
0.0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Contributors at Year-end((1 million persons)
2005
2006
2007
2008
2009
2010
Social Insurance Premium & payment System
Premium
Payment
Pension
Insurance
Unemployment
Insurance
Medical
Insurance
Workrelated
Injury
Insurance
employees 8%
enterprises 20%
others 18%
(Of the wage)
employees 1%
enterprises 2%
(of the wage)
Employees 2%
Enterprises 6%
(of the wage)
Enterprises
all
Enterprises all
(Less than1%
of the wage)
1-5years
12months
5-10years
18 months
10-years
24 months
Outpatient
treatment fees
Personal
account
hospitalization
expenses
social pool
fund
Medical
expenditures;
Injury and
disability
subsidy;
Funeral
subsidy
90days’
allowance,
Original
wages and
positions,
Medical
expenses
20% of average
monthly wage
+
1/120
accumulation in
individual
accounts
Maternity
Insurance
Institutional Arrangement of Housing Security System
publicly accumulated housing funds
Contribution Rate: 14% - Shanghai
Housing Security System
the system of generally affordable
and functional housing
the low-rent housing system
Housing Security
• Opinions on Resolving Housing Difficulties of Low-income
Families in Urban Area. 2007
• Indemnificatory apartments
• Low-rent housing, Affordable housing, Public rental housing
• Indemnificatory apartments and Shanty areas rebuild apartments,
12 million suite constructed, 2008-2011
• Subsidy fund from central public finance
• 7.2 billion,2007------171.3 billion, 2011,
• increased by 121% per year
Achievements
social security expense of the fiscal Increased by 19.4% annually from
budget
2003
urban basic old-age insurance
284 million
urban basic health care insurance
473 million
unemployment insurance
Work-related injury insurance
143 million
177 million
Maternity insurance
139 million
Minimum subsistence guarantee
23.34 million urban residents
42.91 million rural residents
Work-related injury insurance
urban health care insurance
Over 68 million peasant workers
over 46 million peasant workers
New rural cooperative health care 97.5% of the total rural population
insurance
The Coverage of Main Social Insurance Schemes(2014)
•
•
Medical Insurance
(including Urban Employees Basic Medical Insurance, Urban Residents
Basic Medical Insurance, New Rural Cooperative Medical Insurance)
over 95%,2014
•
•
New Rural Cooperative Medical Insurance
98.7%,2014
•
•
Old-Age Insurance
843 million population
•
•
Work-related Injury Insurance
206 million
•
•
Unemployment Insurance
170 million
•
• Social Relief
•
Minimum Living Standard security system for Urban Residents
•
•
•
18.8 million persons, 2014
Security standard: 148 RMB, 2002------450RMB,2015
Monthly subsidy: 43.9 RMB per person, 2002------303 RMB per person, 2015
• Minimum Living Standard security system for Rural Residents
•
•
•
15.93 million persons,2006------52.09 million persons, 2014
Security standard: 840 RMB, 2007- -----3182RMB,2015
Monthly subsidy: 38.8 RMB per person, 2007------145 RMB per person, 2015
• Five-Guarantees Subsistence Program in the Rural Areas
•
•
•
•
food, clothing, housing, medical care, and burial expenses
concentrated subsistence standard: 1608 RMB,2006------5883RMB, 2015
scattered subsistence standard: 1224.5 RMB,2006------4388RMB, 2015
2.13 million persons,2002------5.30 million, 2014
• Medical relief system for urban and rural residents
•
Relief for Urban Vagrants & Beggars
• Central government provided 39.55 billion RMB to Social Relief Program,
2014
Anti-Poverty in rural areas
impoverished population in rural areas (1978-2007)
year
1978
1990
1995
2000
2001
2003
2005
2006
2007
poverty
threshold (RMB)
100
300
530
625
630
637
683
693
785
impoverished
population
250.0m
85.0m
65.4m
32.09m
29.27m
29.0m
23.65m
21.48m
14.79m
Source：China Statistics Yearbook 2008
percentage of
impoverished population(%)
30.7
9.4
7.1
3.5
3.2
3.1
2.5
2.3
1.6
impoverished population in rural areas (2008-2011)
year
2008
2009
2010
2011
poverty
threshold (RMB)
1067
1196
1274
2300(6.3/day)
impoverished
population
40.07m
35.97m
26.88m
128.0m
percentage of
impoverished population(%)
4.2
3.8
2.8
13.4
International poverty line:
$1.25 per day at 2005 purchasing-power parity (PPP), World Bank,2008
Source: China Statistics Yearbook
Service Delivery System of China’s Social Security System
Service
Access
Citizen
Service
Centre
Operation
Process
Institution
Information
Platform
Function
Collection
Process of
Insurance
Participant’s
Information
Social Security Bureau
at Three level: NationProvince-Municipality
or County
Platform of Insurance
Participant’s Account
Information
Interpretation
of Social
Security Policy
Platform of Social
Security Mutual
Funds Information
Finance
Security
Platform of Policy
Information
IT System
Platform of
Information Sharing
and Exchange
Internal
Management
Three Functional
Social Security Module: Front-end
Service Delivery Service; Middle-end
Process
Management; Backend Supervision
Service
Administrative
Institution
of China’s Social
Security System
Ministry of Human
Resource and
Social Security
Old-Age Insurance
Unemployment Insurance
Urban Health Insurance
ork-related Injury Insurance
Maternity Insurance
Ministry of
Civil Affairs
Ministry of Health
Social Relief
Social Welfare
Urban and Rural
Medical Relief
Rural Cooperative
Medical Insurance
Part III
Problem, challenges and
prospects of China’s Social
security system
Problems in general
• Limited coverage
• Inequality
• different benefits -level among different social group and regions,
• heavily focused on the formal sector of urban China.
• A high degree of fragmentation.
• contribution rates vary across municipalities;
• risk pooling remains at the sub-provincial level in most cases;
• portability of benefits is very limited (lack of national unified system).
• The problem in financing:
• deficit of the fund,
• heavy burdens on the employers (29.8%+)
Problems need for further reforms
• 1. to reform the investment and management system of
social security fund, improve the rate of return on fund
investment.
• 2. to solve the problem of over huge payment gap
between employees of public sector and private sector.
• 3. to enhance the support capacity of social security fund,
expand capital sources of the fund, meeting with the
challenge of aging problem.
• 4. to build up a national unified social security
management system, supporting the accounts transfer
inter-province.
Challenges
• Rapid ageing process of the population (funding)
will put more pressure on the old-age pension and medical care
expenditure
• The progress of urbanization and industrialization (coverage)
will make the establishment and improvement of a social security system
covering both urban and rural areas more urgent
• Employment forms become more diversified (transferable).
More employees in nSOEs sector and people employed in a
flexible manner should be covered by the social insurance system
• Pressure from Globalization (cost containment)
Prospect
• We should institute a complete, multi-tiered and sustainable
system for providing basic social security for both the urban and
rural population, with emphasis on making the system more
equitable and sustainable and ensuring the smooth transfer of
social security accounts between localities.
• We should reform and improve the social insurance system for
enterprises as well as government bodies and public institutions,
integrate the basic old-age insurance and basic medical insurance
systems for non-working urban residents and the rural population,
provide sufficient funding for personal accounts for old-age
insurance in a phased way, place basic pensions under unified
national planning, and establish mechanisms for setting standards
on social security benefits and regularly adjusting them that give
due consideration to the interests of people from all walks of life.
• We should widen channels for raising money for social security
funds, introduce a system to manage investment operations of
social insurance funds, and ensure that these funds are safe and
appreciate over time.
• We should improve the social assistance system and the social welfare
system, support the development of charities, and ensure preferential
treatment to entitled groups.
• We should put in place a housing system that combines market supply
and government support, strengthen construction and management of
low-income housing, and better meet poor families' basic housing
needs.
•
We should adhere to the basic state policy of gender equality and protect the
legitimate rights and interests of women and children.
•
We should actively address population aging and vigorously develop old-age
services.
•
We should improve the social security and service systems for the disabled
and effectively protect their rights and interests.
•
We should improve the mechanism for supervising the work of social security
agencies and make social security services more convenient and efficient.
(Selected from the Report to the Eighteenth National Congress of the
Communist Party of China)
Thank you for your attention!
Q&A