D-day for social security

On July 1, China's long awaited Social Insurance Law will come into force. The United Kingdom passed its first National Insurance Act 100 years ago and the United States started issuing social security numbers as a key to its New Deal legislation 75 years ago. Will China's law have the same momentous impact or will it prove something of a false dawn?

At first sight, the law should not be expected to have the same impact. After all, the British and American moves were the starting point for the development of their social security systems. In China, social insurance has been around since the late 1990s, and without any primary law the system has expanded massively in terms of participation and funding. That is partly reflected in the nature of the evolutionary rather than revolutionary law, which codifies what is already there instead of introducing radical changes or new plans.

Nevertheless, it is easy to underestimate the law's potential impact. The law has some important new provisions, especially those relating to the inclusion of foreigners, the transferability of entitlement between different authorities, unified social insurance collection (which should reduce the costs for business), improved financial management and transparency and legal recognition of social insurance fraud.