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China Daily Website

Address on current economy

Updated: 2013-11-15 09:27
( China Daily)

Third, better addressing issues concerning the immediate interests of workers in economic and social progress

Workers' interests are of keen concern to all of us. The trade unions serve as a bridge and bond connecting the Party and the government with hundreds of millions of workers. It is only natural for the trade unions to look after and uphold the rights and interests of workers. Promoting economic growth and protecting workers' rights and interests are fully compatible with each other. We hope workers in their hundreds of millions and people will all work hard. But you just can't milk the cow but do not feed it. Here I wish to emphasize the following:

First, we must practise a proactive employment policy. We must ensure that those in the workforce and those who have just entered the labour market have jobs, particularly, high quality jobs. Employment is of the greatest importance to people's wellbeing. You can rest assured that the government will never slacken its efforts to create employment, which is always the focus of our attention. For us, to realize steady growth is mainly to ensure employment.

Second, we must put in place a strong social security net. We need to advance structural reform, and the most important structural reform is one that enables consumption to play an important role. In many developed countries, final consumption accounts for a significant share of GDP. In China, the ratio is 45.9% for the first three quarters of 2013. To encourage the people to spend more, we need to ensure that they don't have to be concerned about social security. Employment gives people money to consume. But why is it that even though the people have money, and there is about 40 to 50 trillion yuan of saving deposits in the banks in China, consumption is still insufficient? This is because the people have worries. And their greatest worry is about social security, particularly old age care. To be frank, we do have a problem here. Now over 300 million people have joined the urban employees' old age pension scheme. But this year, a total of 38 million people have stopped paying for old age insurance. Many of them are employees of small, medium and micro-sized businesses that are in difficulties, and some are those in flexible employment who stopped paying premium after having done so for 15 consecutive years. The government must find ways to improve the social security system and the trade unions should also get involved. We need to pool our heads together to find ways to address this issue. We should have confidence in the government. During the reform and reorganization of state-owned enterprises in the old industrial bases in Northeast China, about six million workers were included in the old age pension system in one year. But when some enterprises went bankrupt, due to a lack of relevant policy, several million workers left their jobs voluntarily without receiving any compensation. They contributed their share to the development of the People's Republic of China, and the country should not forget them. We must find ways to solve their problems. So we should establish an old age pension scheme that covers the entire population and all employees as well as a safety net that addresses their concerns in life and work. By so doing, we will deliver development benefits to more people in a more equitable way. The medical insurance system now generally covers both urban and rural areas. Here, I want to say a few words about the need to establish a medical insurance scheme covering severe illnesses. Every year, about three million people cannot afford the medical cost of severe illnesses even with reimbursement from the medical insurance scheme. The government, the society and individuals should work together to find ways to solve this issue. Here I want to emphasize that the "heart-warming" activities organized by trade unions have played an important role in addressing the problems of retired workers and those in difficulty. The government should provide policy and funding support to trade unions. Another initiative we have taken is to increase housing supply. We plan to build 36 million low-income housing units during the 12th Five Year Plan period, half of which will be built in former run-down areas. We have decided to rebuild all the run-down areas where many of the retired workers live.

We are also working on a contingency mechanism. During the current stage, both poverty relief and contingency measures are important. Poverty reduction stands out as an important part of China's achievements in the past few decades. Lifting several hundred million people out of poverty is an accomplishment that no one can deny. But we are yet to establish a full-fledged contingency mechanism. There should be a safety net in the society that meets people's basic living needs so that people don't have to be concerned about social security when they look for jobs or start up businesses. This is to make sure that when one encounters difficulty in seeking employment and starting business and cannot support himself, there is a safety net that he can fall back on. Yet a basic safety net is not enough. He should also have the last resort to turn to, which is the contingency mechanism. I believe "heart-warming" activities should be part of this contingency mechanism. Everyone, including the government, society and trade unions that carry out "heart-warming" activities, charity organizations and others, should all get involved to build this contingency mechanism. We should promote social harmony by resolutely preventing frequent occurrence of incidents that push the limit of public tolerance.

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