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Huge sum to be put into social security
By Fu Jing (China Daily)
Updated: 2004-09-18 00:18

Nearly one tenth of China's State assets which stand at more than 12 trillion yuan (US$1.4 trillion) will be transferred to the insufficiently funded social security system within five years.

The National Council of Social Security Fund (NCSSF) President Xiang Huaicheng Friday announced the blueprint, saying "to expand the scale of the fund is the priority" of his organization.

"It will take five years or more to achieve the goal," Xiang said Friday in an address on China's social security system at the week-long 28th General Assembly of the International Social Security Association held in Beijing.

He said the now elderly labourers who for years endured low pay in the planned economy in order to accumulate vast State assets were now entitled to be paid off by social security guarantee.

But Xiang said previously that China's pension problem can be basically solved if the fund reaches two trillion yuan (US$240 billion). By the end of June, the total assets of China's social security fund stood at 143.2 billion yuan (US$17.3 billion), realizing 9 billion yuan (US$1.08 billion) of accumulative profits.

"To expand the national social security fund, a major source of China's financial reserves, we are working with related State Council departments to start transferring State assets as soon as possible," said Xiang.

Xiang said the major source of the fund since it was set up in 2000 was the central government's financial treasury.

At Friday's special session, top State Council officials voiced serious concerns about China's increasingly serious pension problems, while boasting that after years of experiment and practice, a social security framework with Chinese characteristics has taken shape.

China is now an ageing society. As the population's ageing quickens, the number of elderly people is becoming increasingly large.

"This trend will reach its peak in the 2030s," said Zheng Silin, minister of labour and social security.

A recent report by the Chinese Academy of Social Sciences said that compared with developed countries, China's ageing issue will give rise to serious challenges to the country's lofty ambitions of building an all-round, well-off society due to its comparatively poorer social and economic conditions.

Statistics show that, from 2000 to 2007, the number of Chinese people aged 65 or older will increase from less than 100 million to more than 200 million, increasing more than 14 million per year leading to the elderly making up 14 per cent of the total population.

Zheng said China's current framework of support for the elderly will face historic challenges.

There is no doubt that during the ongoing transitional process, the low pension coverage, with only 44.9 per cent of urban employees and 85.4 per cent of retirees covered, will remain a tough issue that will require more governmental efforts.

Since China established and improved its socialist market economy system in the mid-1980s, a series of reforms have been introduced to update the old social security system in place under the planned economy.



 
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