ROSA LUXEMBURG STIFTUNG

On the Path of Establishing Welfare System with Chinese Socialist

Characteristics

Sun WeiYangon, May 28 2014

Definition

Social welfare:social insurance, relief aid & national well-being

Social security:Social insurance & relief aid

Three development phases:

1949-1983: dual structured socialist

welfare

1984-2002: market driven and city–

oriented social security

2003 ~~~: adjustments towards

appropriate universal-type social

welfare system

1949-1983: Dual Structured Socialist Welfare

• Social relief fund and charity production for mutual assistance

• Financed by members in form of collective funds of people’s commune

• Social relief fund financed by state and charity production for mutual assistance

• Cradle-to-grave welfare plus benefits towards family

• Financed by State

• Cradle-to-grave welfare plus benefits towards family

• Financed by State Unit 1

Governments and

affiliated agencies

Unit 2State-owned

enterprises

Rural members

of community corporative

Urban unemploye

d Residents

1984-2002: Market Driven and City –oriented Social Security

Living area

Employ-ment status

Social Insurance Other benefits

Medical care

Pension Maternity Employment Injury

Unemployment

Housing

Relief aid

Others

Urban

Civil Servant √ √ √ √ √ √

Cadre √ √ √ √ √ √

Enterprise employee √ √ √ √ √ √ Depend

s

“Unemployed” resident

√

Rural Community resident √

Financial Responsibilities

Area AffiliationFinancial responsibility

Individual Organization State

Urban

Governments Minority Majority

Public supported units

Minority Majority

Enterprises Shared with enterprises

Shared with individuals

Other residents

Rural

Residents Majority Minority in form of

collective revenue

Problem: medical care coverage of rural population decreased

0102030405060708090

100Rate of Rural Population Coverage%

Problem: rich vs. poor gap increased

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

0

1

2

3

4

5

6

7

8

Oshima Index

Problem: urban vs. rural gap widened

1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 20090

0.5

1

1.5

2

2.5

3

3.5

4

Annual Income Ratio of Urban against Rural

Problem: imbalanced growth of national asset and individual income

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

0%

5%

10%

15%

20%

25%

30%

35%

40%

urban income increase raterural in-come in-creases ratenational revenue increase rate

U.S.A Germany France Japan Mexico Turkey Czechoslova China05

1015202530

Percentage of GDP (1998-2005)

%

Comparison: proportion of national expenditure on social welfare over GDP

2003 ~ : policy adjustment towards “appropriate universal-type social welfare system” • 2003-2009, subsidy increased to rural

residents’ medical insurance and pension

• 2007-2011,medical care and pension established to self-employed and “unemployed” urban residents

• 2006, relief funds increased towards rural families

Compensation of social insurance

towards rural and urban “unemployed”

residents

• 2013, merge social insurance of rural and urban “unemployed” residents

• 2014, merge social insurance for cadres of government-affiliated agencies (non civil servants) with enterprise employees

Merge social insurance

towards equal treatment

•2006-2008, 1-9 free education available to rural and later urban kids•2008, over 700 house constructed towards poor urban families

Better education provision & housing aid

Debates

Justice vs. Efficiency Market vs. Government Equity vs. Disparity Individual vs. Collective

What is socialist characteristics?

Thank You!

Sun WeiE-mail: sunwei@rosalux.cn