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Social Protection in China ---- Reform & Development in the Background of marketization, globalization & urbanization. Prof. Xinping Guan (Nankai University, China). The Background -- The 30-year Economic Reform.

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slide1

Social Protection in China---- Reform & Development in the Background of marketization, globalization & urbanization

Prof. Xinping Guan

(Nankai University, China)

the background the 30 year economic reform
The Background--The 30-year Economic Reform
  • Before the reform, China had a low economic development with a higher welfare protection
  • The economic reform: to provide more economic opportunities and economic security for Chinese people by marketization and a more open economy
slide3

2. The main trends of Socioeconomic Changes in China in the last three decades

    • Marketization: The economic system reform
    • Globalization: The open-door policy
    • Urbanization: rural-urban migration
ii institutional transition in social protection
II. Institutional Transition in Social Protection

1. The Social Protection systems before the reform

slide5

Changes in the urban social protection system

Before the reform

After the reform

The food guarantee

Food market

The job guarantee

Labor market

Public health care

Semi-commercial

Partly user pay

Public education, etc

“Labour insurance”

“Social insurance”

Welfare housing

Housing market

Social Relief for the “Three Nos”

Social Assistance for all the poor

slide7

Changes in the rural social protection system

Before the reform

After the reform

Public (collective) farmland

Household farmland responsibility

Public health care

Commercialized

Public education

Public education

Collective care

Social assistance

“Five Guarantee”

“Five Guarantee”

Disaster Relief

Disaster Assistance

3 characteristics of social protection transition
3. Characteristics of social protection transition
  • Partial marketization of social services
  • The decline of the governmental social expenditure in the period of the reform
slide10
From the traditional universal model to a more selective welfare system:

---- more targeting

  • Institutional gap within the urban reduced, but the rural-urban gap enlarged, and
  • Rural welfare declines
4 the socio economic explanations
4. The socio-economic explanations
  • Market reform: to have an institutional coordination between welfare and economic systems, and to apply the market mechanism in welfare system.
  • Globalization:
  • social policy falls into a dilemma when China enters into the globalizing world economy.

-- to enlarge the social welfare programs to deal with the increasing social problems; -- to reduce social expenditure

slide12
The political system: the social policy is more sensitive to the political/social instability and complains from the worse-off groups.
  • Neo-liberal impacts

Ideological changes during the process of market reform and globalization

slide13

International Economic Competition Caused by Globalization

Economic Growth

Government’s Flexibility in Social Policy

Social Stability

Social Problems Caused by Marketization and Globalization

slide14

5. The achievement and problems in the economic and social transition in the last three decades

  • The Achievement
    • A long term economic development and the increase of income per capita
    • Decline of poverty rate

(by both market reform and the public actions)

    • Higher living quality and better provisions in education, health, etc. for most of Chinese people
slide15

The Problems

-- Higher inequality (The growing Gini Coefficient)

-- “Absolute poverty” still remain, while “relative poverty increase

-- Social protection to the vulnerable groups has been relatively decline as a result of the government’s social expenditure, especially in health care, etc.

-- Unable to solve the social problem caused by urbanization and the rural labor migration

-- Latent problems in the future “ageing society”

iii the new development since 2002
III. The New development (since 2002)
  • Background

1) The government’s stronger responses to the negative consequences of the economic and social reform in 1990s (inequality, Poverty, etc.), and the intension to solve the problems by a better social protection system

2) The changing politic-ideological environment:

    • More emphasis on social equity
    • More “human-centered” policy orientation
    • “Harmonious society”
slide17
3) New economic situation:
    • Rapid economic growth and the governments’ growing financial capacity
  • 4) Rapid industrialization & urbanization after entering into WTO
    • ---- Causing more rural-urban migration
  • The changing pattern of economic development:
    • ---- From the current labour-intensive to the technology-intensive
2 the new ideology and principles of social protection
2. The new ideology and principles of social protection
  • From the economic-centered to the “harmonious society” guided
  • More emphasis on social equity and the human-centered principle
  • More claims of government’s responsibility and people’s rights in social protection
  • To pay more attention to the social protection to the vulnerable groups
slide19
To reinforce the government’s intervention, and increase the government’s social expenditure
3 some new actions in social protection
3. Some new actions in social protection
  • The reinforcement and enlargement of the urban pension system
  • The improvement of social assistance system
  • The further reform of the health care system
  • The better provision of housing benefits in cities
  • The starting actions to include rural migrant into urban social protection
iv the new social protection agenda for the next decade
IV. The new social protection agenda for the next decade
  • 1. The socio-economic changes next
    • Structural change in economic pattern--- may cause more laid-off
    • Urbanization: More rural people move into cities
    • Ageing population: Higher need in welfare provision
2 the challenges for the next decade
2. The challenges for the next decade
  • Social inequality and the relative poverty
  • Continuous action against absolute poverty
  • The balance of economic competition and social protection
  • Better social protection for the vulnerable groups: The unemployed, rural migrants, the disabled, etc.
  • Higher needs in social welfare provisions for the emerging “aged population”
slide24

3. Policy choices in discussion(Institutional arrangements of social protection)-- How and to what extent the government should intervene?

  • Welfare vs. Market
  • Universal vs. selective
  • Government vs. NGOs
  • Equality vs. Efficiency
  • Social governance: Global, national, and local
4 some significant tasks for the next decade
4. Some significant tasks for the next decade
  • Back to the middle way and have a developmental welfare system
  • Increase social protection for the rural people, including the rural migrants, based on a urban-rural integrated social protection system
  • Preparing for the future ageing society
the development in specific areas of social policy
The development in specific areas of social policy

1. The Development of Social Assistance since 2002

the urban minimal living security

Year

People covered

(Millions)

Increase rate to previous year(%)

Total expenditure (billion Yuan)

Increase rate to previous year(%

From Central Gov. (Billion Yuan)

Increase rate to previous year (%)

2000年

4.026

51.4

2.72

76.6

--

--

2001年

11.707

190.8

6.25

129.8

2.3

2002年

20.536

75.4

11.26

80.2

4.6

100.0

2003年

22.350

8.8

15.3

35.9

9.2

100.0

2004年

22.008

-1.2

17.29

13.0

10.2

10.9

2005年

22.328

1.5

19.07

10.3

11.2

9.8

2006年

22.409

0.3

22.21

16.5

2007年

22.709

1.3

27.48

23.7

16.0

The Urban Minimal Living Security
the rural minimal living security

Year

From Central Gov. (Bilion Yuan)

People covered

Increase rate to previous year(%)

Total expenditure (billion Yuan)

Increase rate to previous year(%)

2000

3.002

13.0

2001

3.503

16.7

2002

4.047

15.5

2003

396.8

-1.2

2004

496.4

25.1

2005

776.5

56.4

2006

1509.1

94.3

6.01

2007

3.0

3451.9

128.7

10.41

73.2

The Rural Minimal Living Security
current social assistance systems in china

Programmes

Urban

Rural

MLS

Local 1992, National 1997, reformed in 2002

Local 1994, National 2007

Medical Assistance

National 2005

National 2003

Housing

National 2004, 2007

--

“Five Guarantee”

--

Firstly in 1950s, reformed in 2006

Disaster relieves

 --

The new regulations from 2004-2006

Temporary assistance for the burgers

National 2003, to replace the old “taking-in & sending-back” practice

Juridical Assistance

National 2003

Other governmental

Non-governmental

Current social Assistance systems in China
2 social insurances
2. Social Insurances
  • Pension: the current system was established in 1997, and reformed and improved since 2001;
    • To valid the personal account by central government’s expenditure.
  • The development of the social insurance programmes of medical insurance, unemployment, occupational injury and maternity.
  • But the rural social insurance is still in no progress.
2 the new trends for the next decade
2. The new trends for the next decade
  • Back to the middle way
  • Towards a urban-rural integrated social policy system
  • Preparing for the future aging society
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