1、Chinas Social Reform and Re-building the Welfare SystemLu MaiSecretary GeneralChina Development Research Foundation2ContentChinas Economic Growth and Social DevelopmentRevamping Chinas Social Security SystemPoverty ReductionEducationOld-age SupportMedical CareHousingCharacteristics of the Chinese we

2、lfare system and Difficulties in Revamping itCharacteristicsWelfare policies towards rural migrant workersReforming public financeReforming government performance evaluationConclusions3Chinas Economic Growth and Social DevelopmentChinas economy has been growing rapidly since the start of reform and

3、opening in 1978.4Chinas Human Development Index increased significantly.5Social reform and the rebuilding of the welfare system: a matter of great urgency e gap is widening;Employment uncertainty and insecurity;Underdeveloped social services;6 e gap is widening.7Human development gap between town an

4、d country is widening8Goal of social development:Common prosperity;Ensuring a comfortable life for every Chinese; (2002)Harmonious society; (2006)New phase in Chinas reform and opening: social reform and revamping of the welfare system9ContentChinas Economic Growth and Social DevelopmentRevamping Ch

5、inas Social Security SystemPoverty ReductionEducationOld-age SupportMedical CareHousingCharacteristics of the Chinese welfare system and Difficulties in Revamping itCharacteristicsWelfare policies towards rural migrant workersReforming public financeReforming government performance evaluationConclus

6、ions10Revamping Chinas Social Security SystemTraditional social security system in China SOEs reformCollapse of peoples communeSince the 1990s, the Chinese government has taken numerous steps to revamp the social security system in areas of poverty reduction, old-age support, education, medical care

7、 and housing.Traditional systemState provisionEnterprise provisionRural collective provision111. Poverty ReductionReform of the economic and social system has proven the most effective means of reducing poverty in China;Two-pronged approach: development and relief121.1 Development policiesRural area

8、s: three large-scale relief programmes since 1986;Increase government investment in and low-interest loans to impoverished rural areas;Enable farmers to improve production conditions and poor villages to improve infrastructure;Urban areas: Creating employment;Support for securing small loans and tra

9、ining and preferential taxation policies;Paying people to provide public and community services;131.2 Relief policiesSystem of subsidence allowances for the urban poor (1999);System of subsidence allowances for the rural poor (2004);142. EducationImprove nine-year compulsory education; Support highe

10、r education and secondary vocational education;Education expenditures accounted for 2.86 per cent of GDP in 2006. The goal is to increase this to 4 per cent of GDP.153. Old-age support3.1 Urban areas: “Three-Pillar Model”(1997)A mandatory publicly-managed pillar, a mandatory privately-managed pillar

11、 and a voluntary pillar issues：the shortfall in accounts held by people who worked under the old scheme but will paid under the new one (the “middle men”); the endowment insurance scheme still plagued by limited coverage; the management and investment of the funds;163.2 old-age security in the count

12、ryside（1992）Funded entirely by the individuals;Contemporary reform：allocate more funds to subsidize rural endowment；Besides, the Chinese Government has also borne the cost of endowment insurance for two categories of rural population: Infirm or childless elderly people; rural parents over 60 years o

13、ld who only have one child or two daughters. 174. Medical care4.1 Market-oriented reformSignificant expansion of medical resources and improvement in medical facilities；Problem：medical expenses grow faster than personal e; a large part of it is borne by patients.184.2 Urban and rural medical care sy

14、stemThe employedThe unemployedRural residentsBasic medical insurance for urban workersInsurance covering major illnesses of urban residentsNew-type rural co-operative medical careChinese citizensUrban residentsMedical support and relief for the urban poorMedical support and relief for the rural poor

15、Commercial medical insurance195. HousingHousing reform (1998)the poorest families can rent subsidised apartments provided by the government or their employers; the lower-to-middle e households can buy inexpensive apartments whose cost is subsidised; the more prosperous can either buy or rent commerc

16、ial apartments at market price; Problem:some local governments encouraged the development of commercial housing at the expense of affordable or low-rent housing;20ContentChinas Economic Growth and Social DevelopmentRevamping Chinas Social Security SystemPoverty ReductionEducationOld-age SupportMedic

17、al CareHousingCharacteristics of the Chinese welfare system and Difficulties in Revamping itCharacteristicsWelfare policies towards rural migrant workersReforming public financeReforming government performance evaluationConclusions21Characteristics of the Chinese welfare system and Difficulties in R

18、evamping it1. CharacteristicsA dual structure on the way to integration;Wide coverage with low levels of provision;Rapidly increasing burden on the government;Market-based;Issues:Welfare policies towards rural migrant workers still almost blank;Public finance and government performance evaluation re

19、form needed；222. Welfare polices towards rural migrant workersStill left to fend for themselves;Urban residentsRural residentsMigrant workersOld-age securityEndowment insuranceLandMedical careBasic medical insuranceCo-operative medical careSubsidised treatment of major illnessesEducationFreeFree; su

20、bsidiesLabour protectionIndustrial injury insuranceIndustrial injury insuranceHousingSubsidies; low rentSelf-builtPoverty reliefUrban living allowancesRural living allowances23Involves the value and policies pursued by the government as much as its financial capacity and governance skills;Budgetary

21、allocations from both the central and provincial governments needed;243. Reforming public finance 3.1 Improve the structure of public spending;3.2 Establish sound public finance;3.3 Improve the transparency of public finance.25Government revenue increased rapidly.26Government investment in developme

22、nt activities should be reduced and spending on administrative overhead strictly controlled.27Encourage greater public participation: Participatory Budget Reform in China284. Reforming government performance evaluationMarket failure vs. Government failureExperience of OECD countries be introduced to

23、 China.29ContentChinas Economic Growth and Social DevelopmentRevamping Chinas Social Security SystemPoverty ReductionEducationOld-age SupportMedical CareHousingCharacteristics of the Chinese welfare system and Difficulties in Revamping itCharacteristicsWelfare policies towards rural migrant workersReforming public financeReforming government performance evaluationConclusions3