China Turns to Invest in Pension for Rural residents
By QiaoHui
As the aging population are growing increasingly in China, and over 200 million rural labors work in the urban areas, the ‘empty nest’ problem in rural areas is becoming more and more serious. Approximately after 10 to 15 years, aging problem would be very obvious and the “empty nest” problem would make the old people live harder.
Recently, the State Council Executive Meeting has decided to launch a new type rural social pension program. Nearly 10 percent of China's counties will launch pilot rural social pension programs this year in preparation for a larger system that will eventually cover 900 million people living in rural areas in China. The program will have three revenue sources: contributions by rural residents, transfer from central government and budget arrangement by local government.
Though it is still uncertain about the specific shares between local governments and central government in funding the program, the proportion will surely be varied in provinces according to diversified local economy situation. Each rural resident will receive at least ￥55 pension every month according to the new rural pension program. This indicates a social security system for both urban and rural areas will be established gradually.
During the years between 1992 and 1999, China once implemented a rural social insurance program. However, depending on the financing purely from the rural residents and the communities, the fund capacity was far from sufficient and the program could not survive. In recent years, with fiscal capacity being strengthened, the new rural social pension system starts to be realized.
The launching of this new system serves to the purpose proposed in the 17th meeting of the Chinese Communist Party, which is to improve the people’s living standard and to make all the people “l(fā)earn when they want, get payment when they work, get medical treatment when they are sick, enjoy the care when they get old and live in their own house”. The development of this system also helps to fulfill the key policy which is to enlarge the domestic demand and increase the investment.
Reference to the CCTV program PEOPLE IN THE NEWS and the Xinhua news
