Social Protection in China ---- Reform & Development in the Background of marketization, globalization & urbanization Prof. Xinping Guan (Nankai University, China)

1.The Background -- The 30-year Economic Reform Before the reform, China had a low economic development with a higher welfare protection The economic reform: to provide more economic opportunities and economic security for Chinese people by marketization and a more open economy

2. The main trends of Socioeconomic Changes in China in the last three decades Marketization : The economic system reform Globalization : The open-door policy Urbanization : rural-urban migration

II.Institutional Transition in Social Protection 1. The Social Protection systems before the reform

The food guarantee The job guarantee Public health care Food market Public education, etc Labor market Semi-commercial Partly user pay “Labour insurance” “ Social insurance” Welfare housing Housing market Social Relief for the “Three Nos” Social Assistance for all the poor Changes in the urban social protection system Before the reformAfter the reform

2.The social protection transition during the reform

Public (collective) farmland Public health care Household farmland responsibility Public education Commercialized Public education Collective care Social assistance “Five Guarantee” Disaster Relief Disaster Assistance Changes in the rural social protection system Before the reformAfter the reform

3. Characteristics of social protection transition Partial marketization of social services The decline of the governmental social expenditure in the period of the reform

From the traditional universal model to a more selective welfare system: ---- more targeting Institutional gap within the urban reduced, but the rural-urban gap enlarged, and Rural welfare declines

4.The socio-economic explanations Market reform: to have an institutional coordination between welfare and economic systems, and to apply the market mechanism in welfare system. Globalization : social policy falls into a dilemma when China enters into the globalizing world economy. -- to enlarge the social welfare programs to deal with the increasing social problems; -- to reduce social expenditure

The political system: the social policy is more sensitive to the political/social instability and complains from the worse- off groups. Neo-liberal impacts Ideological changes during the process of market reform and globalization

International Economic Competition Caused by Globalization Economic Growth Social Stability Social Problems Caused by Marketization and Globalization Government’s Flexibility in Social Policy

The Achievement –A long term economic development and the increase of income per capita –Decline of poverty rate (by both market reform and the public actions) –Higher living quality and better provisions in education, health, etc. for most of Chinese people 5. The achievement and problems in the economic and social transition in the last three decades

The Problems -- Higher inequality (The growing Gini Coefficient) -- “Absolute poverty” still remain, while “relative poverty increase -- Social protection to the vulnerable groups has been relatively decline as a result of the government’s social expenditure, especially in health care, etc. -- Unable to solve the social problem caused by urbanization and the rural labor migration -- Latent problems in the future “ageing society”

III. The New development (since 2002) 1.Background 1) The government’s stronger responses to the negative consequences of the economic and social reform in 1990s (inequality, Poverty, etc.), and the intension to solve the problems by a better social protection system 2) The changing politic-ideological environment: –More emphasis on social equity –More “human-centered” policy orientation –“Harmonious society”

3) New economic situation: –Rapid economic growth and the governments’ growing financial capacity 4) Rapid industrialization & urbanization after entering into WTO –---- Causing more rural-urban migration The changing pattern of economic development: –---- From the current labour-intensive to the technology-intensive

2. The new ideology and principles of social protection From the economic-centered to the “harmonious society” guided More emphasis on social equity and the human- centered principle More claims of government’s responsibility and people’s rights in social protection To pay more attention to the social protection to the vulnerable groups

To reinforce the government’s intervention, and increase the government’s social expenditure

Source: China Statistic Yearbook (2007)

3. Some new actions in social protection 1)The reinforcement and enlargement of the urban pension system 2)The improvement of social assistance system 3)The further reform of the health care system 4)The better provision of housing benefits in cities 5)The starting actions to include rural migrant into urban social protection

IV. The new social protection agenda for the next decade 1.The socio-economic changes next –Structural change in economic pattern--- may cause more laid-off –Urbanization: More rural people move into cities –Ageing population: Higher need in welfare provision

2.The challenges for the next decade Social inequality and the relative poverty Continuous action against absolute poverty The balance of economic competition and social protection Better social protection for the vulnerable groups: The unemployed, rural migrants, the disabled, etc. Higher needs in social welfare provisions for the emerging “aged population”

3. Policy choices in discussion (Institutional arrangements of social protection) -- How and to what extent the government should intervene? Welfare vs. Market Universal vs. selective Government vs. NGOs Equality vs. Efficiency Social governance: Global, national, and local

4. Some significant tasks for the next decade Back to the middle way and have a developmental welfare system Increase social protection for the rural people, including the rural migrants, based on a urban- rural integrated social protection system Preparing for the future ageing society

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The development in specific areas of social policy 1.The Development of Social Assistance since 2002

The Urban Minimal Living Security Year People covered (Millions) Increase rate to previous year(%) Total expendit ure (billion Yuan) Increase rate to previous year(% From Central Gov. (Billion Yuan) Increase rate to previous year (%) 2000 年 年 年 年 年 年 年 年

The Rural Minimal Living Security Year People covered Increase rate to previous year(%) Total expendi ture (billion Yuan) Increase rate to previous year(%) From Central Gov. (Bilion Yuan) —— —— —— —— —— —— —

Current social Assistance systems in China ProgrammesUrbanRural MLS Local 1992, National 1997, reformed in 2002 Local 1994, National 2007 Medical AssistanceNational 2005National 2003 HousingNational 2004, “Five Guarantee”-- Firstly in 1950s, reformed in 2006 Disaster relieves --The new regulations from Temporary assistance for the burgers National 2003, to replace the old “taking-in & sending-back” practice Juridical AssistanceNational 2003 Other governmental Non-governmental

2.Social Insurances Pension: the current system was established in 1997, and reformed and improved since 2001; –To valid the personal account by central government’s expenditure. The development of the social insurance programmes of medical insurance, unemployment, occupational injury and maternity. But the rural social insurance is still in no progress.

2. The new trends for the next decade Back to the middle way Towards a urban-rural integrated social policy system Preparing for the future aging society

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