II. Old-age Security System
China regards the establishment of an old-age security system corresponding
to the level of the country's socio-economic development and ageing population
as an important task and a priority area in its undertakings for the aged. In
recent years, China has gradually established and improved an old-age security
system involving the government, society in general, the family and individuals
in its efforts to guarantee the basic life of elderly people.
Establishing an Old-age Insurance System in Urban Areas
In recent years,
the Chinese government has gradually established a uniform basic old-age
insurance system in urban areas that covers all the employees of different types
of enterprises, persons engaged in individual businesses of industry or
commerce, and people who are employed in a flexible manner. By the end of 2005,
the number of people participating in the basic old-age insurance scheme across
China had reached 175 million, 43.67 million of whom were retirees. The
disbursement of the old-age insurance fund was 404 billion yuan. The state has
also set up an adjustment mechanism of the basic pension, by which the state
adjusts the level of the basic pension of enterprise retirees in light of price
fluctuations and wage raises of enterprise employees. A retirement system for
staff members of government agencies and public institutions has been
established; these people get their pension either directly from the central
government finances or from their former employers at the rate stipulated by the
The state raises funds for the basic old-age insurance through multiple
channels so as to increase the fund reserve needed for the increasingly larger
gray population and ensure that enterprises' employees get their basic pension
in full and on time. The state has made greater efforts to ensure that payments
are made to the funds for the basic old-age insurance. By the end of 2005, the
balance of China's basic old-age insurance funds was 404.1 billion yuan, and the
total payment to the funds that year was 431.2 billion yuan. The government has
also increased its financial input into the fund. In 2005 some 65.1 billion yuan
of the basic old-age insurance fund came from government finances at different
levels. Besides, a nationwide social security fund has been established, and by
the end of 2005 the accumulated total was 201 billion yuan.
The state is actively developing supplementary old-age insurance. It guides
and helps enterprises with adequate capacity to set up annuities for employees.
Both enterprises and employees pay toward the annuity, so that funds are
accumulated and managed under individual accounts. By the end of 2005, a total
of 24,000 enterprises all over China had set up enterprise annuities, with 9.24
million employees participating. The state also encourages the development of
old-age insurance attached to personal savings deposits; and guarantees the
livelihood of elderly people through multiple channels.
Probing the Establishment of an Old-age Security System in Rural
About 60 percent of the elderly people in China live in rural areas.
Based on the socio-economic development level in rural areas, the Chinese
government emphasizes the role of the land and the family in providing for
people advanced in age. It has begun to study the establishment of an old-age
social security system in rural areas in order to guarantee the basic livelihood
of the elderly people there.
Giving full play to the role of the land in ensuring elderly people's
livelihood and protecting farmers', including the elderly people's, right to
operate land contracted to them. The Law of the People's Republic of China on
the Protection of the Rights and Interests of Elderly People stipulates that an
elderly person's guardian is obligated to till the land contracted to the
elderly person he/she supports, and also to tend forestry and livestock under
the elderly person's charge. The revenue from these will go to the elderly
person as a guaranteed source for his/her basic livelihood. The state encourages
people to sign a "family support agreement," which stipulates how the elderly
person is to be provided for and what level of livelihood he/she will have.
Village (neighborhood) committees or other relevant organizations will supervise
the implementation of the agreement in order to make sure that elderly people
receive the support they are entitled to. At present, all families in rural
areas are encouraged to sign a "family support agreement." By the end of 2005,
some 13 million "family support agreements" had been signed.
Probing the establishment of an old-age social insurance system in rural
areas. By the end of 2005, about 1,900 counties in 31 provinces, autonomous
regions and municipalities under the central government had established their
own old-age social insurance systems. More than 54 million farmers were
involved, with the accumulated insurance funds reaching some 31 billion yuan.
And more than three million farmers now receive pensions. The total disbursement
of old-age insurance payments in 2005 was 2.13 billion yuan.
China actively develops social security systems of various forms, and
priority is given to a special group of elderly people to be covered in the
social security system in rural areas. These are elderly people who have lost
the ability to work, who have no source of income, and who have no legal
guardians whatsoever to support them, or their legal guardians do not have the
ability to support them. They enjoy the state's "five guarantees" system, which
means that their food, clothing, housing, medical care and burial expenses are
taken care of and subsidized by the government.
At present, more than 4.6 million elderly people across the country are
benefiting from this government policy. For rural couples who have followed the
state family planning policy and given birth to only one child (or two
daughters), when they turn 60 they receive a bonus from a special fund made
available by the central and local governments. By the end of 2005, some 1.35
million people had received such a bonus.
The Chinese government pays attention to taking care of elderly farmers whose
land has been requisitioned in the process of urbanization. By gradually
including those farmers in the social security system, the government makes sure
that their basic livelihood is permanently guaranteed. So far, 15 provinces,
autonomous regions, and municipalities directly under the central government
have drawn up social security policies regarding farmers whose land has been
requisitioned. About six million farmers are now covered by social security
schemes, and some 50 billion yuan has been raised for this purpose.
Establishing Aid System for Impoverished Elderly People
government has included the alleviation and elimination of poverty among elderly
people in its anti-poverty strategy and the plan for the development of
undertakings for the aged. The state has established a system that guarantees a
minimum standard of living for urban residents. Families with per-capita income
lower than what is needed to ensure the minimum standard of living in their area
are entitled to a special allowance according to the standard.
In 2005, some 22.33 million impoverished urban residents (including
impoverished elderly people) received such allowances, including almost all the
people eligible for receiving the minimum living allowance. In the rural areas,
the state practices an aid system by which families in most straitened
circumstances receive a fixed amount of aid regularly or other livelihood
assistance when the need arises. In regions where conditions are appropriate,
the state is actively probing the establishment of a system that guarantees the
minimum standard of living for rural residents.
At present, 8.65 million rural residents have been designated as people in
the most serious financial difficulties, and they receive fixed aid from the
government regularly. Some 9.85 million rural residents are entitled to receive
the minimum living allowance, including poor elderly people who do not meet the
requirements of the "five guarantees" system. The state encourages areas with
adequate capacity to build homes for the aged, grant old-age subsidies and, for
those over the age of 80, a special allowance in order to improve the lives of
Meanwhile, local governments are actively organizing "helping the poor
through production" schemes. They are doing their best to help poor people in
their 60s who are generally healthy and strong enough to work to engage in
farming, aquaculture and processing business, so that they can support
themselves. China should give full play to the role of all social sectors in
helping poor elderly people, encouraging NGOs like the old-age foundations to be
found all over the country, as well as enterprises, public institutions and
individuals to provide charitable and other assistance.
Various other forms of assistance are officially encouraged, such as pairing
up between a well-off family and a poor elderly person so that the former may
give more help to the latter, making commitments to support poor elderly people,
doing volunteer work for them or paying visits to convey greetings to them.
Therefore, various types of assistance are provided to the poor elderly people.