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

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

2. 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

3. 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

4. II. Institutional Transition in Social Protection 1. The Social Protection systems before the reform

5. 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

6. 2. The social protection transition during the reform

7. 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

8. 3. Characteristics of social protection transition • Partial marketization of social services • The decline of the governmental social expenditure in the period of the reform

10. 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

11. 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

12. 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

13. International Economic Competition Caused by Globalization Economic Growth Government’s Flexibility in Social Policy Social Stability Social Problems Caused by Marketization and Globalization

14. 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

15. 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”

16. 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”

17. 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

18. 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

19. To reinforce the government’s intervention, and increase the government’s social expenditure

20. Source: China Statistic Yearbook (2007)

21. 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

22. 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

23. 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”

24. 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

25. 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

26. Thanks

35. The development in specific areas of social policy 1. The Development of Social Assistance since 2002

36. 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

37. 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

38. 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

39. 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.

47. 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

48. Thanks