Developing a Distinctively Chinese Social Security System Through Concrete Actions

Social security is a major issue of national governance, and developing a distinc­tively Chinese social security system is integral to Chinese modernization. Presi­dent Xi Jinping, who regards work relat­ing to social security as a matter of great importance and concern, has put forward a series of important theoretical conclusions regarding the reform and development of social security. In doing so, he has defined the direction forward and the foundational guidelines for social security work in the new context.

I. Understanding the essence and significance of developing a distinctively Chinese social security system

As countries differ in development levels, social conditions, and cultural character­istics, it is only natural that a diverse array of social security systems exist around the world. Internationally, there are primarily three models of social security: universal welfare state protection, mutual aid-based social security insurance, and provident fund savings scheme. In China, the social security system is primarily based on a social insurance model. For many years now, the Communist Party of China (CPC) has upheld the fundamental requirements of socialism and worked in line with the laws governing the development of modern social security, as well as China’s basic national conditions, including its large population, limited economic foundation, and pronounced urban-rural and regional disparities. Giving consideration to the distinctive economic and social features of each development stage and integrating fine elements of traditional Chinese culture, it has established the world’s largest social security system, which is endowed with distinctive Chinese qualities and a full range of functions. Our efforts in this field have been defined by the following features.

A fundamental guarantee provided by our commitment to upholding and strengthening the CPC’s leadership

The CPC has always placed great impor­tance on the people’s wellbeing and social security. When the People’s Republic of China was founded in 1949, it instituted a comprehensive labor insurance system. Thereafter, following the launch of reform and opening up in 1978, the CPC designated social security as a vital institutional pillar for building a socialist market economy and improving people’s living standards. It made steady strides in building a social security system, developing a model that combined personal accounts with a social pool of funds. With this, the main pillars and supports for China’s social security system were put into place.

After the 18th CPC National Congress in 2012, the Central Committee with Xi Jinping at the core put the task of develop­ing the social security system in a position of greater importance. Exercising more centralized and unified leadership, it was able to coordinate the interests of all sides and mobilize the energies of all involved to fast-track the development of the social security system. This paved the way for a number of historic achievements and trans­formations. The urban and rural resident old-age pension systems were placed under unified management, efforts were made to bring government office and public institution pension schemes into line with enterprise schemes, enterprise employees’ basic old-age pension funds were also put under unified national management, and a personal pension system was established. As a result of this progress, a multi-tiered, multi-pillar old-age insurance system was basically established. In addition, the systems for unemployment insurance and workers’ compensation were also steadily improved.

Social security system reform involves profound, multifaceted adjustments to major interest structures. It is an excep­tionally complex, difficult, and sensitive endeavor. The reason for China’s globally recognized success in this field, building up a vast social security system literally from scratch, can be attributed to the CPC, which has based every step on the overall inter­ests of the nation. It has brought all sides onto the same page, taken steps to improve the top-level design, and mobilized the resources and manpower necessary for a major undertaking such as this.

The immutable aim of putting the people above all else

Social security bears on the most practical interests of greatest and most direct concern to the people. Pursuing the goals of achiev­ing universal coverage and ensuring benefits for all, the CPC has implemented a univer­sal participation plan. Through a coordi­nated urban-rural approach, it has extended coverage to more residents and steadily increased equability. These efforts have seen us weaving the largest social security net in the world in terms of population coverage.

By the end of 2023, the number of people covered by China’s basic pension, unemploy­ment insurance, and workers’ compensation programs reached 1.066 billion, 244 million, and 302 million, respectively. Compared with 2012, these figures represent increases of 278 million, 92 million, and 112 million, respectively. Acting on the principle of shared development, China has also steadily increased social security benefits to ensure that the gains of reform and development benefit people more fairly. By 2023, the average monthly basic pension for national enterprise retirees had doubled that of 2012. Average monthly unemployment insur­ance benefits rose from 707 yuan in 2012 to 1,814 yuan in 2023, and the average monthly disability allowance under the workers’ compensation scheme climbed from 1,864 yuan to 4,000 yuan. During the battle against poverty, thanks to preferential policy support, coverage was ensured by 2020 for all 60.98 million registered poor residents under the basic old-age pension scheme.

A social security center staff member helps raise awareness of social security policies at an enterprise in Ba’nan District, Chongqing, March 12, 2023. CHINA SOCIAL SECURITY

Following a principle of ensuring lifelong benefits and services based on lifelong records, we have put in place a basic five-tiered service and administration network in urban and rural areas. With 98% of the population now possessing a social security card, we have made it as convenient as possible to access services and benefits, which is reflected in the steadily rising levels of satisfaction among the public. In China, developing the social security system is about improving people’s wellbeing and making society fairer. It is about leveraging a range of institutional and policy measures to effectively alleviate people’s concerns about related risks.

The defining theme of high-quality and sustainable development

High-quality development embodies the defining qualities of the people’s demands in this era. As the principal challenge in Chinese society has evolved, the people have come to expect a higher quality of social security, with the demand for coverage giving way to a demand for good coverage. Sustainable development, which is reflected in the underlying principles of intergenera­tional balance and institutional maturity, is fundamental for building a dependable social security system. The trend of popula­tion aging is pronounced in China, with 297 million people aged 60 or above, account­ing for 21.1% of the population. As a result, the dependency ratio has continued to rise. Compared with many other countries, China has a large elderly population base. Its population is aging faster, and the peak period of aging will last longer. Moreover, significant disparities exist between regions and between urban and rural areas with respect to aging.

Urban residents now account for 66.2% of the total population, with the number of rural migrant workers totaling 298 million. Given this situation, it is important that we adapt the social security system to facilitate the movement of labor and coordinate the development and alignment of urban and rural old-age pension systems. At the same time, we need to ensure a balance between the revenues and expenditures of social insurance funds across regions. The diversi­fication of employment, and particularly the rise of new employment forms, has created challenges and problems for the traditional labor-based social security system. It is not yet equipped to address such issues. For high-quality and sustainable development of social security, it is vital that public services are inclusive, meet essential needs, and guarantee basic living standards for people in difficulty. We must also grasp the impor­tance of stability, continuity, and cumulative progress in work relating to people’s wellbe­ing and strive to resolve the inadequa­cies, imbalances, and lack of coordination affecting its development. These efforts will ensure that our people feel a fuller, more solid, and more sustainable sense of fulfill­ment, happiness, and security.

The principles of doing everything in our power and working within our means

The principle of doing everything in our power underscores the need for the CPC and the government to take responsibil­ity and seize the initiative. The principle of working within our means stresses the importance of always grounding our work in practical realities and ensuring that social security remains in step with economic and social development. China is currently in the primary stage of socialism and will remain so for a long time. This is the overarching reality we cannot afford to ignore when developing the social security system. We must, therefore, strike a balance between short-term imperatives and long-term objectives, and between what is needed and what is possible, implementing social security policies and measures that suit our level of economic development and refin­ing systems to ensure fair and reasonable adjustments to social security benefits.

We should always remember that, just as boats rise with the level of water, social security should increase in proportion to economic development. Any actions that defy the laws of development must be avoided. We must avoid the welfare catch-up that some countries have pursued, as this is unsustainable. We should also steer clear of the excessive welfare provisions adopted by some other countries, as this will result in insufficient social vitality. Based on the principles of doing everything in our power and working within our means, our approach should be to meet basic needs, focus on key areas, refine systems, and guide expectations. This is what will deliver consistent and incre­mental progress based on sustained efforts. By securing the necessary headway at each defined stage, we will ensure that people can see and benefit from improvements in the ongoing development of social security.

The practical requirement of adopting well-conceived and well-balanced policies

We must follow a systems-based approach. To do so, we must thoroughly understand the interplay between the various inter­ests in social security, including those of central and local governments, urban and rural areas, different regions, and various groups, as well as the links between histori­cal problems and new issues arising in reform and development. We need to strike a balance between current and long-term interests, local and overall interests, and individual and collective interests. This will enable us to put policies on a sound footing and make reform measures more systematic and coordinated.

We must have a strategic vision. This means fully appreciating the crucial role of social security in promoting social fairness, enhancing people’s wellbeing, and driving economic and social development. To realize continuous progress, the development of social security must be well-aligned with Chinese modernization and advanced based on the overall development agenda of our Party and our country.

We must heighten our awareness of risks. This entails analyzing and anticipat­ing new situations and challenges that may arise in relation to social security in the future. It requires us to respond to popula­tion aging and labor market shifts driven by the transformation of industry. Just as we should prevent economic, social, and external risks from spilling into the domain of social security, we should also prevent social security problems from escalating into broader economic, social, and political risks. It is important that we show greater foresight and initiative in our work and take preemptive measures against potential problems. Finally, we must have a global outlook, closely monitoring the latest inter­national trends in social security to learn from both successes and failures and apply relevant insights to our own context based on our own needs.

In this way, we will be able to maintain a stable social security system, which in turn, will help foster realistic expectations throughout society.

II. Making concrete progress in advancing the key tasks

The social security system serves as a safety net for people’s wellbeing, a means of regulating income distribution, and a buffer for economic fluctuations. It is thus a funda­mental institutional guarantee for ensuring and enhancing people’s wellbeing, uphold­ing social equity, and improving people’s lives. Harnessing the strengths of the CPC’s leadership and the socialist system, we must keep working to make social security more sustainable, accessible, secure, conveni­ent, and procedure-based, ensuring that our people can enjoy more comprehensive, dependable, and equitable social security.

Promoting sustainability by deepening major institutional reforms

Sustainability is the fundamental require­ment in the development of a social security system, as it directly impacts people’s trust and expectations toward the safeguards for their wellbeing. Reform and innovation are wellsprings for greater sustainability in the social security system over the long term. This means that we must focus on systematically integrating and efficiently coordinating institutional reforms as the top priority. We need to further advance the unified national management of enterprise employees’ basic old-age pension funds, evaluate the performance of provincial governments in managing old-age pensions, develop the third pillar of private pensions, roll out the personal pension system nation­wide, and enhance coverage and contribu­tion levels. To improve the old-age pension system for urban and rural residents, we should gradually encourage more eligible collective economic organizations to subsi­dize the contributions of insured individu­als and reward those who contribute more and for longer periods with more benefits. Sustained efforts also need to be made to consolidate and improve the unified management of funds for unemployment insurance and workers’ compensation at the provincial level.

Improving accessibility by promoting high-quality participation

The aim of improving accessibility is to bring more people within the scope of coverage. This is not only essential for promoting social equity but also embodies the law of large numbers, which is integral to social insurance. We should put the focus on promoting high-quality participa­tion, targeting key groups such as person­nel in new forms of business and in flexi­ble employment, as well as rural migrant workers. Policies and measures on participation need to be refined to boost enroll­ment, improve the mix of participants, and ensure contribution rates and benefit levels are commensurate. This will help address issues among certain groups, including gaps in coverage and individuals dropping out of social security schemes or suspend­ing contributions. Steps should be taken to expand pilot programs for occupational injury insurance for people in new forms of employment. To play our part in faster promoting a unified national market and coordinated regional development, we must strive to improve the flow of labor and talent by unifying and standardizing relevant policies and benefits and improving the system for transferring insurance accounts across jurisdictions.

Bolstering oversight for stronger social security

Security is of crucial importance, as it concerns every sum that people save for their retirement and every contribution they make to emergency funds. It is vital for ensuring the social security system operates in a dependable way. To enhance security, we must keep a tight rein on all risks relating to the safety of funds and see that parties with primary responsibility fulfill their duties and oversight bodies perform their role. We will continue to take a zero-tolerance approach to insurance fraud, including the fabrication and inflation of insurance claims, embez­zlement, and other illegal activities. We will keep working to reinforce the integrated risk prevention and control framework, which encompasses policies, administration, infor­mation management, and supervision, and strengthen coordination between person­nel, institutional, technological, and public prevention measures. To better control and prevent risks relating to social insur­ance funds, we will look into extending the nationwide operations management model to cover all types of insurance.

Improving convenience by refining administration and services

Convenience is a fundamental objective in meeting the public demand for social security services. Guided by the Regula­tions on the Provision of Social Insurance Services, we must see that all aspects of this work are well-regulated, procedure-based, and meticulous. We need to improve the unified social insurance public service platform in order to transition from addressing individual bottlenecks and diffi­culties to enhancing the overall experience, from meeting universal needs to providing personalized services, and from focusing on reducing processing time and increasing efficiency to realizing automated matching and proactive service provision. In line with the drive to provide one-stop government services, we should introduce high-quality one-stop services for matters relating to resident social security cards, retirement, and other issues, ensuring such services are readily available and accessible for the public and businesses. Moving forward with the full roll-out of a new service model based on all-purpose social security cards, we should create more application scenarios for the digital versions of these cards and gradually implement the all-purpose card system nationwide.

A staff member from a local social security bureau completes verification procedures for an insured resident in Huangnan Tibetan Autonomous Prefecture, northwest China’s Qinghai Province, March 8, 2023. Thanks to the implementation of a universal participation plan, China has weaved the largest social security net in the world in terms of population. CHINA SOCIAL SECURITY

Making social security more procedure-based to promote law-based development

By making our work more procedure-based, we will provide an important guaran­tee for consolidating the major achievements of social security reform and for developing a well-defined and mature system. In China’s social security system, we largely use depart­mental regulations and policy documents to regulate overall operations and coordinate the interests of different parties. That said, some long-standing social security policies need to be turned into laws and regulations to provide more rigid constraints for the management of fund revenues and expendi­tures and better define the responsibilities of the central and local governments. There are also some laws and regulations that need to be promptly revised in light of new circum­stances. All this calls for greater emphasis on law-based development and on making institutions and regulations more unified. Based on the new circumstances and major reform requirements, we need to step up efforts to repeal, amend, and enact laws in order to create a sound legal basis for reform. We should better enforce existing laws and regulations and act promptly to refine supporting policies and implementation guidelines. To ensure that relevant laws are rigorously enforced, we need to boost public awareness, ensure stronger coordination and collaboration, and take steps to enhance the authority and effectiveness of laws and regulations.

III. Accurately grasping the key relationships

By accurately understanding the key relationships involved in developing a distinctively Chinese social security system, we will be able to work in more targeted and creative ways, make sounder and more effective policies, and provide more efficient and convenient services. This will ensure we continue to secure achievements in advancing social security programs. The key relationships we must balance are as follows.

Goal-driven and problem-oriented approaches

A goal-driven approach will help keep social security work on the right path. A problem-oriented approach, on the other hand, will help us make progress along this path. Therefore, we must be both goal-driven and problem-oriented. We should not set objectives without considering real social issues, nor should we become so engrossed in specific problems that we lose sight of our overall objectives and direc­tion. Being goal-driven means focusing on achieving high-quality and sustainable development in social security and carefully planning short-, medium-, and long-term tasks to move forward in a methodical and systematic way. Being problem-oriented means working to identify and address existing issues based on the goals we have set. We should make sustained efforts to shore up areas of weakness and shortcom­ings, with a focus on resolving key issues, which include expanding coverage, striking a balance in terms of benefits, improving institutions, and strengthening the system.

Systemic integration and key priorities

While developing China’s social security arrangement is a systematic project, we also need to concentrate on certain key priori­ties in order to resolve the main challenges in this field. It is necessary to both make reform more cohesive and focus on deliver­ing breakthroughs in key areas, with prior­ity on the most urgent tasks. To promote system integration, we should ensure that our social security system is well-aligned with economic and social policies, linked to employment, wage distribution, and labor relations, and complemented by social assistance and social welfare programs. We should put a stronger focus on ensuring comprehensive coordination and integra­tion across the entire chain, from system development and management to cover­age expansion, benefit adjustments, fund oversight, service administration, risk prevention, and team development. In focusing on key priorities, we should pool resources for advancing major reforms and implementing key tasks in all areas and aspects of social security. In all of this, old-age pension reform should serve as a key lever for driving overall progress.

Unified standards and innovative explorations

While unified standards are vital in the development of the social security system, innovation is crucial for maintaining vital­ity. Therefore, we must both rigorously enforce national unified standards while also respecting explorative practices at the community level, in order to maintain the right balance between adhering to principles and promoting flexibility. Following unified standards means adhering to the principles of mutual aid and shared responsibility in social security, of the law of large numbers, and of steady enhancement of coordination and institutional constraints, so as to promote unified management nation­wide. We should, on the basis of uphold­ing unified standards, actively innovate measures for implementing policies and delivering services, with a focus on new situations and problems that have arisen. The aim should be to develop replicable and scalable practices that will help make the social security system and its services more flexible, inclusive, and adaptable.

Formulating policies and providing management and services

Policymaking lays the foundation for improvements to the social security system, while management and services ensure that policies are put into effect. We need to both make our policies more targeted, effective, and practicable and enhance our manage­ment and services. In policymaking, we must ensure we are providing high-quality policies that stand up in practice and the eyes of the people and are easy to imple­ment at the community level. In provid­ing management and services, we should see that, on the basis of well-conceived and enabling policies, we put in place a compre­hensive management and services frame­work that is adapted to people’s multi-level and diversified needs, with greater empha­sis on providing more meticulous services. We should ensure that people clearly under­stand their interests and policy processes, and overcome the final hurdles in service provision to create as much convenience as possible for the people and businesses.

Development and secure performance

Development is a prerequisite for ensur­ing the secure performance of the social security system, while secure performance enables the development of social security programs. On the one hand, we need to ensure high-quality and sustainable devel­opment of social security programs to meet people’s diversified needs, coordinate differ­ent interests, respond to social concerns, and resolve social problems. On the other hand, we need to prepare for worst-case scenarios and increase our awareness of risks, strik­ing a balance between the pace of reform, the speed of development, and the capacity of society to cope with change. To develop social security programs, we must keep building up our institutions and systems and enhance our governance capacity and standard with regard to administering such programs. To ensure secure performance, we must pay more attention to preventing and defusing all kinds of risks and hidden dangers in the realm of social security, with a focus on changes in public opinion, the security of fund payment processes, fund supervision and management, cyber and data security, and other major areas. This will help foster an environment that enables smooth and stable operations within the social security system.

Wang Xiaoping is Minister and Secretary of the CPC Leadership Group, Ministry of Human Resources and Social Security.

(Originally appeared in Qiushi Journal, Chinese edition, No. 9, 2024)