BEIJING, Sept. 7 (Xinhuanet,By Quan Xiaoshu ) --
China is aging. According to statistics, citizens aged 60 and about account for
nearly 11 percent of its 1.3 billion people.
China is focusing on improving its insurance system to cope with the aging population, which will reach its
highest percent in the 2030s, according to a report issued by the Information
Office of the State Council Tuesday.
The government established a social security system
for business employees in urban areas across the country in 1997. Under the
system, employees who reach retirement age stipulated by law and have paid their
share of the premiums for 15 years or more,shall be entitled to collect a basic
pension each month. Last year,the average monthly pension was 621 yuan (75 US
However, under the old planned economy, employees
relied entirely on the former employers to support their retirement. In 1993,
the government first tried a new method to combine the social pool and personal
But the lack of fund accumulation in the period of
planned economy has left many personal accounts empty, and the annual 300 to 400
billion yuan of old-age insurance premium collected in recent years is mainly
used to guarantee the currently existing 36 million enterprise retirees, said Hu
Xiaoyi, a spokesman with the Ministry of Labor and Social Security.
"In urban areas, every three employees in average pay
the premium to support the pension payment for one retiree. When the aging peak
comes, it may need 10 employees to back four or more retirees, if no significant
measures are taken to set up stable fund reserves," Hu said.
Beginning in 2001, the government began a pilot
project in northeast China's Liaoning Province aimed at replenishing personal
accounts and accumulating funds.
So far, Liaoning has collected 11 billion yuan (1.33
billion USdollars) via personal accounts. Based on the success, the pilot
project has been expanded to Jilin and Heilongjiang provinces this year and will
later be promoted all over the country.
In addition to experimental reforms, China has also
expanded the coverage of its basic old-age insurance.
China's social security program initially covered
only employees at state-owned and collectively-owned enterprises in urban areas.
In 1999, this coverage was expanded to foreign-invested, private and other types
of enterprises in urban areas. In 2002, it was further broadened to include all
those who were employed in a flexible manner in urban areas.
Last year, the number of people participating in the
basic old-age insurance scheme in China reached 155.06 million, 116.46 million
of whom were employees.
"In the following period, employees from
foreign-invested, private and other non-state-owned enterprises as well as those
who are employed in a flexible manner will be the major targets to expand
old-age insurance," said Wang Dongjin, Vice Minister of Labor and Social
As the population ages and the number of retirees
increases, the pressure on the social security program is greater.
"In some poor areas, especially the middle and
western areas, the basic old-age insurance premium paid by local enterprises
cannot patch up the pension that should be granted to retirees," said Meng
Zhaoxi, an official with the ministry.
In 2003, the central budget allocated 47.4 billion
yuan (5.7 billion US dollars) to supplement the basic old-age insurance funds at
25 places in the middle and western areas.
According to the report, the Chinese government has
encouraged businesses to set up annuities for their employees in addition to
participating in the compulsory basic old-age insurance.
"China's social security system still calls for
continuous reforms and improvement. One of the most knotty problem is to set up
a sound old-age insurance system, which will experience a key period for
progress in the first two decades of this century," Wang Dongjin said. Enditem