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MERICS China Mapping

Who gets what? Social Security in China

Who gets what? Social Security in China

The question about the benefit level and generosity of public old- age pensions, health insurance and social assistance is relevant not only for 1.3 billion Chinese citizens but also for the growing number of non-Chinese working and living in China over longer periods of time. Since the Social Insurance Law was enacted in 2010, foreign nationals are legally obliged to take part in China's social security system.

Benefit levels vary depending on the respective province and program

Within China the levels of benefits for pensions, health insurance and social assistance are by no means uniform. Benefit levels differ across provinces and between the three major groups defined by employment status and residence: urban employees, urban residents without employer and rural residents. Since benefit levels in absolute terms are the highest in Eastern provinces, officials in these rich coastal provinces fear a scenario of poverty induced migration from the Western and Inland provinces.

In this mapping we compare the cash benefits from public pension schemes and social assistance in relation to local income levels, and the reimbursement rate for inpatient treatment in hospitals across ten provinces.

Old-age pensions often below the poverty line

There are three main pension schemes in China:

  • Urban employees basic social insurance pension (urban employees in formal employment)
  • Urban residents’ social insurance pension (urban residents without employer)
  • New type rural social insurance pension scheme (all rural residents irrespective of employment status)

In absolute terms, the pension for urban employees in Shanghai and Beijing are the highest. However, in relative terms the opposite is true. Despite this telling example, it remains true that the pension levels for the growing number of urbanites without a permanent official job, migrant workers and rural residents fare the worst. In many localities their pension benefits are even below the official poverty line. Again Shanghai and Beijing, as well as the economically well-developed province of Guangdong, deviate from the rule. Benefit levels from the urban residents’ social insurance pension and new type rural social insurance pension converge with or even exceed the benefit level provided by the social assistance scheme dibao which provides a minimum livelihood guarantee.

Dibao – relative benefit levels higher in rural than in urban areas

The minimum livelihood guarantee (dibao) – comparable to any social assistance program run in developed countries – is residence based and means-tested. It is operated on the basis of a clear demarcation between the urban and rural areas. Judging from the relative benefit levels it is an interesting observation that the rural dibao is more generous than the urban dibao in all of the selected provinces. Cross-provincial differences in the benefits levels are more pronounced in the rural dibao.

Reimbursement for inpatient treatment particularly unequal

Due to the lack of data for the reimbursement rates in the system for rural residents, the reimbursement rates for the urban employee health insurance and the urban resident health insurance, both for the year 2011, are presented. With the exception of the case of Beijing and Shanghai, participants in the urban employee health insurance scheme benefit of higher reimbursement rates than urban residents. The biggest difference is found in the province of Jilin – it amounts to 28%.

Basic security and broad coverage

The Chinese government follows a strategy of “basic security“ and “broad coverage“ in the field of social security. Due to the large gaps in the socio-economic development levels across Chinese provinces a convergence of absolute benefit levels cannot be expected in the near future. Yet, there are positive signs for the convergence of relative benefit levels across provinces and between major groups of the populations, setting an end to the old urban-rural dualism.

References:

Ministry for Human Resource and Social Security PRC (2012). 中国劳动统计年鉴- 2012 [Statistical Yearbook of Labour 2012]. Beijing: China Statistics Press.

Huang, Xian (2014). Expansion of Chinese Social Health Insurance: Who Gets What, When and How?", Journal of Contemporary China, 23(89): 1 – 29.

China Statistical Office (2013). 中国统计年鉴 – 2013 [ Statistical Yearbook of the PRC 2013]. Beijing: China Statistics Press.

Ministry of Civil Affairs PRC (2013). 中国民政统计年鉴 - 2013 [ Statistical Yearbook of the Ministry of Civil Affairs 2013]. Beijing: China Statistics Press.

 

 

  • Stiftung Mercator
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