Completely implementing the theory of "Three Representatives,"
persisting in taking the interests of the people as the point of
departure and the end of work, the Communist Party of China keeps
close attention to the living and production of the people, makes
great efforts to improve the social security system and promote
employment and reemployment and effectively protects the legitimate
rights and interests of the workers. Since the 4th Plenary Session
of the 13th CPC Conference, the 3rd leading group of the CPC, with
Comrade Jiang Zemin as the core, has made a set of major decisions
concerning labor and social security. During this period, with the
deepest reform and most rapid progress of the labor and social
security system, the market-oriented employment mechanism and the
social security framework with Chinese characteristics have been
initially established and a series of fundamental historic changes
have taken place in the field of labor and social security.
I. Expanded employment, great progress in reemployment and
fundamental changes in employment structure and employment
mechanism.
Employment is essential for the living of the people and has always
been one of the priorities of the CPC. Since the 4th Plenary
Session of the 13th CPC Conference, the Central Committee of CPC
has put employment on an important position on the economic and
social development agenda and taken a set of active and effective
policies and measures to tackle the issue. To deal with the issue
of laid-off workers from SOEs, which becomes more and more pressing
in recent years, the Central Committee has made a number of
decisions, making arrangements for guaranteeing basic living of the
laid-off workers and their reemployment. With the proper guidance
of the Central Committee, the whole Party and society work together
and have achieved great progress in employment and
reemployment.
1. Employment keeps expanding.
From 1990 to 2001, the total employment in China increases from 650
million to 730 million with a growth of 83 million. Of which, urban
employment increases from 170.41 million to 239.4 million with a
growth of 69 million while rural employment increases from 477.08
million to 490.85 million with a growth of 14 million. Despite the
sharp gap between labor supply and demand as well as the downturn
of the world economy, China has maintained stable in employment.
The urban registered unemployment rate has been effectively kept at
around 3 percent for most of the years, though it started to
increase in the recent two years resulting from the mounting
employment pressure. By the end of 2000, the urban registered
unemployment rate was 3.1 percent while it rose to 3.6 percent by
the end of 2001 and 3.9 percent by the end of Sept. 2002. At
present, the localities are actively implementing the policies and
measures adopted at the National Reemployment Conference and
strengthening reemployment promotion. With concerted efforts, the
urban registered unemployment rate is expected to keep at 4 percent
by the end of this year, which is lower than the planned control
rate of 4.5 percent.
2. Employment structure improves continuously.
The employment by industry shows that the tertiary industry becomes
the main channel of employment expansion. The share of employment
in the tertiary industry increased from 18.5 percent in 1990 to
27.7 percent in 2001 while the share of primary industry decreased
from 60 percent to 50 percent. The employment by ownership
indicates that the individual and private businesses are becoming
the major sources for employment expansion with their rapid growth.
During the period of 1990 to 2001, total employment in the urban
individual and private economic entities increased by 30 million,
accounting for 40 percent of the total increase in urban employment
in the same period. The employment by urban and rural areas shows
that urbanization is accelerating while the share of rural
employment declined from 73.7 percent in 1990 to 67.2 percent in
2001, with a decrease of 6.5 percent.
3. Substantial progress has been made in reemployment.
In
order to address the issue of labor redundancy resulting from the
long practice of the planned economy, the Central Committee draws
up the guideline of "encourage merging, regulate bankruptcy, lay
off and reallocate workers, downsize and enhance efficiency and
implement the Reemployment Program ". Attention has been placed on
the principle of properly dealing with the relationship between
deepening SOE reform and promoting reemployment, combining
downsizing and enhancing efficiency with reemployment promotion,
and laying off and reallocating workers in accordance with the
affordability of the society. As a result of the continuous efforts
of reemployment promotion, remarkable progress has been made in
reemployment. During the period from 1998 to the first half of
2002, there have been 26 million workers laid off from SOEs, of
which 17 million have been successfully reemployed through various
channels and forms. A large number of workers transferred from the
secondary industry to the tertiary industry, from SOEs to
non-public economic entities. As a result of the released
redundancy in the SOEs, the enterprise reform has been deepened and
their competitiveness improved.
4. The market oriented employment system initially takes
shape.
Responding to the need of the socialist market economy, the 3rd
Plenary Session of the 14th CPC Conference put forward the
initiative of "reforming the labor system and developing labor
market" so as to give a full play to the fundamental role of market
mechanism in allocating labor resources. The 4th Plenary Session of
the 15th CPC Conference further required that the market oriented
employment system should be gradually developed. With the progress
of the reforms and the development of the labor market, the market
oriented employment system has initially taken shape, under which
the workers are enabled to seek for jobs by themselves while the
market plays the role of adjusting employment and the government
the role of promoting employment. At present, not only the new
entrants of the labor force, but also the laid-off workers, the
unemployed, the graduates of universities and secondary educational
institutions and the demobilized military officers and soldiers get
employed or reemployed through the market. Great change is seen in
people's perception to and pattern of employment. The employment
forms turn to be more flexible and diversified with the emerging of
such new employment forms as part-time, casual, seasonal work and
flexible arrangements in working hours. New ideas including seeking
for jobs on one's own, self-employment, lifelong learning and
improving employability have been widely accepted.
In
the process of developing market oriented employment system, the
labor market and employment service system has been strengthened.
The public employment service system has been initially
established. By the end of 2001, there were 26,000 job placement
agencies in China, of which 18,000 were public job placement
agencies providing public service including job placement,
occupational guidance, vocational training, labor supply and demand
information and community job vacancies development. Vocational
training has been strengthened and the system of pre-employment and
pre-post training has been set up. The vocational qualification
system has been further improved. 35 million vocational
qualification certificates have been issued to individuals passed
occupational skill testing.
5. The transfer of rural surplus labor to non-agricultural
sectors has been accelerated.
At
present, the employees in the township enterprises amount to 130
million. In addition, 80 million rural labor have migrated to work
in the cities, the remittance has become an important source of
income for the farmers. The regulation and service system for the
rural migrant workers has been gradually developed under the
guideline of "equal treatment, proper guidance, improved regulation
and better service". The regulation, supervision and inspection on
the labor contract, wages and working conditions of rural migrant
workers have been strengthened so as to protect their rights and
interests.
China faces great employment pressure at present and will still
face the pressure in a period of time. There is a sharp conflict
between the demands of full employment and the large labor force
and poor labor quality. The tasks of employment and re-employment
remain very arduous. To improve employment and re-employment work
in the new era, the CCCPC and the State Council held the National
Reemployment Conference in September 2002, which further specified
the guidelines, objectives, policies and measures for employment
and reemployment. Focusing on the re-employment of laid-offs, an
active employment policy has been formulated. We will actively
carry out the tasks and requirements set by the National
Re-employment Conference, pay more efforts to promote employment
and reemployment, take effective measures to define
responsibilities, implement policies, ensure financial input and
secure supporting measures so as to open up new prospects in
employment and re-employment.
II. The policies of "Two Guarantees" and "Three Security Lines"
have been well implemented and the framework of a social security
system with Chinese characteristics initially established.
The 13 years since the 4th Plenary Session of the 13th Conference
of CPC in 1989 has witnessed the fastest and best development of
social security in China. In particular, since the 15th Conference
of the CPC, with a view to promoting reform and development and
maintaining stability, the CCCPC made the significant decision to
implement the "Two Guarantees" and "Three Security Lines" policies
and speed up social security system reform focusing on pension
insurance, unemployment insurance, basic medical insurance and the
minimum living standard guarantee system for the urban residents,
which have played a crucial role in deepening SOE reform,
restructuring the economy as well as maintaining social
stability.
1. The "Two Guarantees" policy has been well
implemented.
The "Two Guarantees" policy (namely to guarantee the basic living
of the laid-offs from the SOEs and to guarantee the timely and full
payment of basic pension benefits to the retirees of enterprises)
is a major decision of the CCCPC. From 1998 to the end of June
2002, the laid-offs from the SOEs accumulated to 26 million, 90
percent of whom have entered the re-employment centers in the
enterprises. Nearly all the laid-offs in the centers can receive
basic living allowance on time and their social security
contributions are also paid by the centers. During the same period,
the retirees that receive basic pension benefits increased from 27
million to 32 million, with an average annual increase of 1.5
million. Almost all retirees can receive pension benefits on time
and in full amount. In addition, 21.5 billion Yuan pension benefits
in arrears has been paid out. To implement the "Two Guarantees"
policy, the Central Government has allocated earmarked subsidies of
130 billion Yuan RMB to the "Two Guarantees Fund" in the old
industrial bases and the middle and western areas from 1998 to
2001. The implementation of "Two Guarantees" policy has rendered a
powerful support to safeguard the workers' legitimate rights and
interests.
2. The "Three Security Lines" have been gradually
improved.
The "Three Security Lines" are important components of the social
security system with Chinese characteristics. The first security
line is the basic living guarantee system for the laid-offs from
the SOEs, which is aimed to guarantee the basic living standard,
pay social insurance contribution and promotes reemployment. The
second security line refers to the unemployment insurance system
targeted at the unemployed, which provides the unemployed with
unemployment benefit and actively promotes their re-employment
Since the 1990s, the unemployment insurance system reform has been
speeded up, with its coverage extended to employees in all types of
enterprises and public institutions in urban areas. By September
2002, the participants in the unemployment insurance totaled 101
million, with an increase of 36 million over the end of 1989 and
the beneficiaries totaled 4 million. Since 1998, the delivered
unemployment benefit has amounted to 37 billion Yuan RMB. In
addition, 16 billion has been allocated to reemployment centers in
the enterprises. Therefore, the unemployment insurance system not
only guarantees the basic living for the unemployed, but also
greatly supports the guarantee of the basic living of the laid-offs
in the SOEs and reemployment promotion. The third security line
refers to the minimum living standard guarantee system of urban
residents covering all urban residents whose family income per
capita is lower than the prescribed level. Its main function is to
guarantee the essential living of the low-income residents. At
present, the minimum living standard guarantee system of urban
residents has been in place in all cities and towns where the
county government is located, with 19.63 million beneficiaries. The
"Three Security Lines" are well integrated and have effectively
guaranteed the basic living of the laid-off workers, the unemployed
and the low-income residents, serving as an effective social safety
net.
3. Great progress has been made in pension insurance system
reform.
Since the early 1990s, the pension insurance reform for enterprises
has been accelerated. The pension insurance system developed from
the "enterprise insurance" to social pooling and established the
cost sharing mechanism among the government, enterprises and
workers. The basic pension insurance system of enterprise employees
under which social pooling is combined with individual account has
been initially set up. The socialized delivery of pension benefit
and socialized administration of and service to the retirees have
been in place. The basic pension adjustment mechanism has been
established, through which the benefit level of the retirees has
been raised so as to enable the retirees to benefit from social and
economic development. At the end of 2001, the basic pension
insurance system covered 142 million people, which was twice more
than that of 1990.
4. All-round medical insurance system reform has been
initiated.
In
accordance with the objective of establishing a basic medical
insurance system for urban employees by combining social pooling
with individual accounts, set by the 3rd plenary session of the
14th CPC Congress, the State Council promulgated Decisions on
the Establishment of the Basic Medical Insurance System for Urban
Employees in 1998. It decides to establish a medical cost
sharing mechanism, medial service competition mechanism and
gradually form a multi-level medical insurance system to replace
the public medical care and labor insurance medical care system. At
present, participants in the basic medical insurance amount to 83
million. The quality of medical service has been improved, revenues
and expenditures of the medical insurance funds maintained balance.
The work injury insurance and maternity insurance reform progress
steadily, covering 43 million and 35 million workers respectively
at the end of 2001.
5. The pilot program of enhancing urban social insurance system
reform has reaped initial fruits.
In
accordance with the objective of establishing a social security
system independent of the enterprise, with multiple financial
resources, regulated management and socialized service set by the
5th plenary session of the 15th CPC Congress, the State Council
formulated the pilot program to enhance the urban social insurance
system, and designated Liaoning Province to experiment the program,
focusing on making the individual accounts under the basic pension
insurance a real account and merging the system of basic living
standard guarantee of laid-off workers with the unemployment
insurance. The pilot program began in July of 2001, and witnessed
great progress so far. The pilot program has accumulated experience
for nationwide social security system reform.
With the challenges of population ageing, urbanization and
globalization, the improvement of social security system will
remain as a tough task for China for a period of time. We will save
no efforts to strengthen the policies of the "Two Guarantees" and
the "Three Security Lines" so as to provide due benefits to all
beneficiaries. Efforts will also be given to expand the coverage of
social insurances, further improve the basic pension system,
actively promote the medical insurance reform and soundly promote
the merging of the system of the basic living guarantee for the
laid-off workers with the unemployment insurance. Attention will be
on strengthening the collection of social insurance contributions
and promoting the socialized administration and service in social
insurance.
III. The wages of employees has been increasing, legal
construction on labor and social security enhanced and the legal
rights and interests of the workers well protected.
1. Rapid wage increase and remarkable upgrade of the living
standard of the working population.
In
2001, the annual wages per capita amounted to 10,870 Yuan, which
was 5 times over the number of 1990. Deducted by the inflation
factor, the real annual increase is 8.1 percent during this period,
which ranks the top since the founding of the People's Republic of
China. At the same time, the minimum wage system has been
established, together with wage guideline system and labor market
wage level guidance system. All of these systems have supported the
establishment of a macro-regulation system on wage income
distribution and facilitated the transformation of the government's
function. In mid 1990s, the standard working hour was shortened
twice, first from 48 hours per week to 44 hours and then from 44 to
40 hours. Meanwhile, the public holidays have been increased from 7
to 10 days each year, which forms 3 "golden weeks" respectively in
May, October and Spring Festival. Therefore, the total rest time
for employees has increased from 59 to 114 days per year.
2. Legal construction on labor and social security has enhanced
and the legal rights and interests of the workers are well
protected.
In
order to realize the principle of rule by law and protect the
legitimate rights of the workers, a set of laws and regulations
have been promulgated during this period--the Labor Law, the
Trade Union Law, Law on the Protection of the Minors, Law on
Guarantee of the Rights and Interests of Women, Law on the
Protection of the Disabled, as well as Provisional Regulations on
Collection of Social Insurance Contributions, Regulations on
Unemployment Insurance, Regulations on Minimum Living Guarantee for
Urban Residents, and Regulations on Prohibition of Child Labor.
23 ILO conventions have been ratified, by China, including 3 Core
Conventions, that is, Equal Remuneration Convention, Minimum Age
of Admission to Employment Convention, and Worst Forms of Child
Labor Convention. Moreover, the tripartite consultation system
has been initiated and the labor dispute resolution system
developed, along with the establishment and development of the
Labor Contract system and the Collective Contract system. The
strengthened labor and social security inspection plays an active
role in protecting the rights and interests of workers, punishing
and rectifying illegal practices through daily inspection and
supervision, targeted investigation and comprehensive
regulation.
At
the next stage, we will further enhance legal construction on labor
and social security, administrate strictly by law and strengthen
law enforcement so as to protect the legal rights and interests of
the working population. At the same time, the enterprises income
distribution system reform will be further deepened, while the
incentive system and restrict measures that suit for modern
enterprises system are going to be developed. The macro-regulation
on income distribution will be strengthened and an income
distribution framework composed of "a small high-income group, a
small low-income group and a large middle-income group" will be
formed.
(China.org.cn November 12, 2002)