BEIJING, Sept. 25 -- A well-functioning social security system is integral to China's transformation from central planning to a market economy. The present undergrowth of the country's social security system should thus be a great cause for concern.

    The first annual meeting of China Social Security Forum that opened last Saturday in Beijing offered a chance to thoroughly examine the issue closely related to everyone's welfare.

    High-profile support that the central government gave at the meeting is definitely needed to renovate the under-funded social security system. The Chinese Government attaches great importance to the establishment of the social security system and regards it as the backbone of its market economy.

    At the meeting, Vice-Premier Huang Ju called for not only more efforts but also a long-term mechanism to improve the social security system. He also stressed the necessity to base these efforts on the country's economic and social reality as well as to co-ordinate planning for urban and rural areas.

    Such policy suggestions are pertinent to the sharpening contradiction between people's growing demand for a sound social security network and the underdevelopment of such a system.

    The Chinese Government has considerably stepped up its efforts to build a social security system that can effectively cushion the masses against the shocks market-oriented economic reforms brought about.

    From 1998 to 2005, the old-age pension fund increased from less than 150 billion yuan (US$18.7 billion) to 500 billion yuan (US$62.5 billion), up nearly 20 per cent annually.

    By the end of 2005, the number of workers in China covered by the basic old-age pension system stood at 174 million, by basic medical insurance system 137 million, by work injury insurance 84 million and maternity insurance 54.08 million.

    And to address the payment pressure to be brought along by the aging population, the central government has also established a national social security fund as a strategic reserve, which so far has accumulated more than 200 billion yuan (US$25 billion).

    Nevertheless, compared with the progress, the challenges that lie ahead are enormous.

    First, the rapid aging of the population alone will add a lot of new names to the old-pension payroll in coming years, making it very difficult for the currently under-funded social security system to afford.

    Second, as China's urbanization drive moves on, the migration of young rural residents by millions every year into urban areas will both put extra pressure on the urban social security system and undermine support for seniors at countryside.

    Third, more flexible employment will leave more workers hired by private firms out of the existing social security system that was originally designed to mainly cover workers in the State sector.

    All these challenges require urgent efforts to overhaul the current social security system.

(Source: China Daily)