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LI Mingfu Realization and Protection of the Right to Social Security in China
September 18,2015   By:
Realization and Protection of
the Right to Social Security in China
 
LI Mingfu
China
 
Principles, Objectives and Institutional Guarantees for the Realization of the Right to Social Security in China
 
A. Principles for the realization of the right to social security in China
 
The Chinese Government pursues a people-oriented social security reform, taking people’s needs into adequate consideration. Three principles are observed during the reform of social security system: the principle of national conditions, requiring consideration for the reality and future development of China’s economy and society to ensure the social security standards accords with the level of social and economic development; the principle of regional difference, requiring a multi-layered social security system in order to meet the social security needs at different levels; the principle of unification between rights and obligations. Therefore, the construction and reform of social security system shall conform to three characteristics: fairness, meaning that the social security system shall be implemented in a fair basis and meet the minimum living standards of people, and in the meantime cover all levels of the society regardless of social levels, genders, nationalities or regions; justice, requiring the social security system to operate in the scope of legal justice and under the supervision of all social organizations through proper policies and coordination of concerned authorities; sharing the achievements of social and economic development among the whole society is the fundamental objective pursued by the social security system as well as an effective measure to realize social security system.
 
China has been sticking to and improving the current basic pension insurance system and basic medical insurance system combining social pooling and individual account by fully funding individual account, optimizing investment and operation of the social security funds, making institutional and capital preparations for aging population boom and transforming the pay-as-you-go mode into partial accumulation mode. Besides, China also encourages qualified enterprises to set up enterprise annuity, promote the reform of pension insurance system for public institutions, and achieves equal enjoyment of social security among urban employees of all kinds.
 
B. Objectives for the right to social security in China
 
1. Broad coverage
 
As a requirement of central authorities for the reform of social security, broad coverage means “accelerating the construction of social security covering both urban and rural areas”, because more contributors of the social security system leads to a more sustainable social security and a more stable society.
 
China has a large population and complicated geopolitical and economic situations, therefore the realization of broad coverage of the right to social security among all levels of society on a fair and just basis is particularly important and urgent. The coverage of social security shall expand continuously with contributors of pension insurance, medical insurance, unemployment insurance, work injury insurance and maternity insurance increased, especially for the coverage for migrant works and informal employees.
 
2. Integration
 
To realize the objective of the integration of social security system, the gaps of social security system between urban and rural areas, among different regions or different social levels shall be narrowed. Only in this way, the social security can realize the function of adjusting income redistribution mechanism and promoting social fairness to make all people enjoy the achievements of reform and opening-up. An integrated social security system is not only conductive to the realization of equal living rights for all people and the guarantee for welfare of all working people, but plays a role in risk sharing to give full play to the mutual help function of the social security system in a most effective way. Besides, implement an integrated social security system across the country can not only reduce expense in management, but ensure more stable and effective operation of the social security system. At present, China is working on the formulation of detailed policies to narrow the gap of social security benefits between urban and rural areas, among different regions or different social levels.
 
3. Multi-layer
 
The Chinese Government is committed to establishing a multi-layered social security system -- "taking social insurance, social assistance and social welfare as basis, basic pension insurance system, basic medical insurance system and minimum living standards system as focus, philanthropy and commercial insurance as supplement, the improvement of social security system shall be accelerated." Measures for establishing a multi-layered social security system include: promoting the reform of basic pension insurance system for public institutions and exploring to establish rural pension insurance system; fully implementing the construction of basic medical insurance for urban employees, basic medical insurance for urban residents and new rural cooperative medical service; improving the minimum living standards system for urban residents and the level of benefits gradually; improving the insurance systems of unemployment, work injury and maternity; upgrading the level of overall planning for social security to formulate and implement a unified method for transferring social security relationship across the country.
 
4. Sustainability
 
To implement this principle, China shall strengthen the legal system of social security with participation of government and social forces in the construction of social security system and improve the management efficiency to ensure the social security policies are in support of the people; follow the path from narrowing gaps and eliminating social inequality gradually to the complete fairness of social security system. There is an important principle that shall be observed in the construction and reform for a sustainable social security system: the current social security system would not imperil offspring, only then can it meet the needs of contemporaries for improving living quality and provide guarantee for the living of offspring, laying the foundation for the sustainable development of social security system. Sustainable social security system “refers a social system covering urban and rural residents based on the needs of contemporaries, achieving broad coverage on the basis of multi-layered and differentiated establishment and improvement and expecting a social security system for offspring with well-established security items, more functional derivatives, flexible security mode and improved security level in the future.”
 
In the long run, the social security system of China shall develop from guaranteeing the basic living standards of people to improving the living quality of people as well as from guaranteeing minimum living standards to improving social security system, heading for a social security system of nationwide unification, urban-rural integration and equal service.
 
C. Institutional guarantees for the realization of the right to social security in China
 
1. Enhancing the legislation on social security
 
Improving relevant legislation on social security to ensure all systems of social security operate under the mandatory rules of laws. The social security in China is clearly stipulated by the Constitution as article 14 of the Constitution of the People’s Republic of China states that “the State should establish and improve the social security system suitable to its economic development level” and article 45 states that “citizens of the People’s Republic of China have the right to material assistance from the state and society when they are old, ill or disabled. The State develops social insurance, social relief and medical and health services that are required for citizens to enjoy this right. The state and society ensure the livelihood of disabled members of the armed forces, provide pensions to the families of martyrs and give preferential treatment to the families of military personnel.” Under the guidance of the Constitution, China has gradually upgraded the legislative level of social security to ensure the authority, enforcement and effectiveness of social security legislation as well as established and improved the administrative enforcement and judicial system of social security. It is noteworthy that the implementation of Social Insurance Law and revisions of other relevant regulations are of great importance.
 
2. Improving management system of social security
 
To enhance coordination among administrative departments of social security, realize rational labor distribution and cooperation among these departments and improve the function of community in social security service, such measures shall be taken: establish and improve service organizations for social security; enlarge and define the service content for social security; promote the standardization, informatization and professionalization of management service; promote multi-cooperation in social security service and pay particular attention to mobilizing social forces to participate in the construction of social security.
 
3. Management and operation of social security fund
 
Expanding the coverage of social insurance and upgrading the level of overall planning, and realizing the value maintenance and appreciation as well as sustainable development of social security funds by improving expenditure structure of social security funds, extending investment channel for social security funds, increasing the yield, and improving management and supervision systems for social security funds.
 
4. Improving rural social security system
 
The establishment of rural social security system is a stage-by-stage process from developed and pilot areas to the whole country gradually. The institutional design would give consideration to different needs of different groups, establishing a multi-layered social security system with basic social security system as focus and supplementary security based on rural collective and voluntary participation of farmers as supplement, in order to promote the urban-rural integration in many aspects.
 
5. Realizing the integration of social security system
 
The Realization of institutional mergence of social security systems for urban and rural residents, integration of social security systems for public institutions and enterprises, and full implementation of comprehensive social assistance system with urban-rural integration lay foundations for the eliminating gaps between social security benefits of public institutions and enterprises, the realization of equality and sustainable operation of social security system.
 
Outlook for the Development of the Right to Social Security in China
 
The Chinese Government has realized that a well-established social security system can make a great and important contribution to the realization of national prosperity, national revival and people’s wellbeing. At present, the social security system of China has achieved the basic goal of “two exempts and one relieve”, namely making all people enjoy basic social security so as to exempt them from survival crisis and medical hardship as well as relieve them from pension worries in institutional level. Another two objectives of social security strategy are set for the future: the first objective is to realize the comprehensive and stable development of social security system with Chinese characteristics enjoyed by all people; based on the further improvement and sustainable development of social security system with Chinese characteristics, the second objective is to improve the level of benefits, realize the equality of social security, guarantee the living quality of people, meet the needs of people for social security and relevant services in an all-round way, and move towards a welfare society of socialism with Chinese characteristics. To achieve the above-mentioned objectives for construction of social security system, China has formulated a series of macro policies for the reform of social security system, including:
 
First, realize the integration of social security systems in urban and rural areas. “people-oriented” means citizens shall enjoy equal social security system regardless of social levels, nationalities, regions or ages. The establishment of a broadly covered, multi-layered and sustainable social security system with Chinese characteristics cannot be achieved without the realization of integration of social security systems in urban and rural areas. The underdeveloped situation of rural social security shall be changed as soon as possible and the basic living standards of farmers shall be guaranteed. At present, urban residents enjoy more favorable, diversified and stable social security system than rural residents, which intensifies the inequality of the right to social security. Only the realization of the integration of social security systems in urban and rural areas can bridge the gap and achieving the goal of a relatively comfortable life. In addition, the integration of social security systems in urban and rural areas is a critical step of complete coverage of social security system.
 
Second, implement a proactive social security system. To properly address the relationship between social security and employment, the government shall enhance the employment promotion function of the unemployment insurance as well as the prevention and rehabilitation functions of work injury insurance, prolong retirement age and encourage more aged workers to continue working; improve system of labor standards and coordination mechanism of labor relations, enhance supervision on labor security and arbitration for dispute settlement, and establish a harmonious labor relations. Full employment provides the development of social security with essential material foundations; on the other way round, the social security system is conductive to the employment promotion. An over-high level of social security may lead to the indolence of people and labor cost increase, thus restraining employment. Therefore determining a moderate level of social security is critical to proper addressing of labor relations. The earlier intervention of social security will lead to less risks and shorter duration of risk as well as more positive effects of intervention measures, contributing to preventing risks, dealing with inequality proactively and promoting the inclusiveness of society and economy. The intervention measures are also conductive to preserving job opportunities, promoting productive activities and re-employment. Intervention measures of social security, including unemployment prevention, re-employment plan, clean work place and promotion of healthy lifestyle, generate a lot of benefits, making the social security system play a proactive and preventive role while playing a protective role. China shall draw experience from other countries and regions in addressing labor relations and carry out a proactive social security policy.
 
Third, increase public input in social security. Reinforcing the input in social security by increasing funding sources for social security and changing the situation of low public input as soon as possible; realizing the institutionalization of the relationship between social security and public finance, strengthening the guarantee for social security sources and preventing financial crisis of all social security systems with public finance taking the fallback responsibility for social security; improving budget auditing system of social security and adopting more transparent financial system of social security to bring the incomes and expenses of social security into the supervision scope of the government and legislative bodies.
 
Fourth, coordinate social security policies with population characteristics and policies. The rapid aging of population has a complicated influence on the realization of the right to social security. In reform and construction of social security system, China shall pay special attention to the guarantee for the aged, ensuring the aged is covered by social security and avoiding oversized payment gap of pension insurance and medical insurance due to demographic changes at the same time. Adjusting the birth policy to increase the number of young population, providing longer maternity leave and humane working conditions for employees giving birth to child and prolonging retirement age are important measure in countering the challenge of aging.
 
In conclusion, with the establishment of a broadly covered, multi-layered and sustainable social security system that can ensure the realization of fairness and justice, the right of Chinese people to social security can be protected and realized. Only in this way can a fair and stable society be established and social conflicts resolved, thus providing a solid base for the building of a moderately prosperous society in all aspects and sharing the benefits of reform and opening-up among all people. As a result, the human rights would be protected and realized in an all-round way.
 
(The author is Director of Social Security Research Office, Institute of International Labour and Social Security, Ministry of Human Resources and Social Security, P.R.C.)