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China focus: Rapid urbanization poses challenges for China's social security system
2012/03/02
  

HEFEI, March 2 (Xinhua) -- Expecting to receive pension insurance previously enjoyed only by city residents, Chen Wenyun is happy to finally call himself an "urban citizen" of the city of Hefei, capital of east China's Anhui province.

"Only when I'm covered with pension insurance do I feel like an urban citizen," said the 45-year-old native of Hefei's Shushan district.

Hefei implemented a new social security system in February that covers both rural and urban residents without distinction. It is part of the city's efforts to address the rural-urban social security gap, which has widened in tandem with the nation's accelerating pace of urbanization.

In China, access to public services is determined by the "hukou," or household registration system. The system allows for benefits to be doled out to people who are properly registered as local residents of any given city or town, a status that most migrant workers do not possess.

This inequality in resource allocation discourages migrant workers from settling in certain areas. If not properly addressed, the system will hamper China's economic transition process, experts have warned

With a good salary and a stable place of residence in the city, Chen is one of hundreds of millions of Chinese farmers who have joined the country's expanding ranks of urbanites since China kickstarted economic reforms at the end of the 1970s.

China's urban population exceeded its rural population for the first time at the end of 2011, accounting for 51.27 percent of the country's population of nearly 1.35 billion people, according to figures released by the National Bureau of Statistics.

The historic population shift in China, which was an agrarian nation for centuries, has diverted policymakers' attention toward making social insurance available to all people, regardless of their place of residence.

The improvement of China's social security system has become a hot issue prior to this year's annual sessions of the nation's top legislature, the National People's Congress (NPC), and its advisory body, the Chinese People's Political Consultative Conference (CPPCC), both of which start on March 3.

During last year's sessions, Premier Wen Jiabao reiterated the importance of improving the social security system and increasing social security benefits. Wen said the government will work to allow China's basic pension and medical insurance systems to cover all urban and rural residents the 12th Five-Year Plan period (2011-2015).

Participation in the basic medial insurance system for working and non-working urban residents and the new rural cooperative medical care system will increase and stabilize, Wen added.

Some local governments have already made substantial progress in achieving coordinated social security between rural areas and cities.

In southwest China's city of Chengdu, urban and rural residents enjoy pension plans with identical terms and conditions. Rural residents of five of China's provinces and municipalities are able to receive help from the government to cover medical expenses.

Despite these achievements, China still has a long way to go to unite its urban and rural social security systems. 30-year-old Sun Ling faces the dilemma of choosing between urban and rural pension insurance plans.

Although she has been happy to settle in the city of Suzhou in east China's Anhui province after years of hard work, she has yet to enjoy the benefits of an urban pension insurance plan.

Sun said that if she loses her job, she will not be able to pay for her insurance and will lose the subsidy the government offers as a result.

"I'll wait for new government policies that allow me to take my insurance with me wherever I work," Sun said.

Sun isn't interested in joining a rural pension plan either. According to the plan, participants pay 500 yuan (79.4 U.S. dollars) each year, allowing them to receive a monthly pension of 109 yuan after 15 years, an amount that Sun says is not nearly enough when compared with her living expenses in the city.

Insurance information should be made available in multiple areas, allowing people to have access to public services wherever they are regardless of their place of residence, according to Zhu Jun from the Department of Human Resources and Social Security of Anhui province.

 
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