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Institutional construction is important to prevent new wage defaults, commented an article in Workers' Daily.

Fujian Province recently implemented a series of measures to enhance the construction of an enterprise credit system. These measures including initiating a key supervision mechanism, a wage guarantee fund system, a responsibility system and a strict market accession system will help build a long-term mechanism to prevent defaulting on migrant workers' payments.

This is a significant trial move to solve an ongoing problem.

All levels of government have been working on this issue and have achieved some results in recent years. But some measures are implemented inconsistently or only have limited effect.

Fujian Province has mobilized all concerned departments in a joint effort. For example, the labor department will coerce enterprises with a record of defaulting to deposit guarantee funds and publicly shame enterprises that have large arrears. As to those enterprises that deliberately default on payments time and again, the department of industries and trades will revoke their qualifications or cancel their licenses. All this shows the provincial government's determination to solve the problem.

At the end of 2003, the State Council made a plan that the issue of migrant workers' defaulted wages should be solved by 2006. This commitment should be fulfilled. Even after wage arrears have been settled, new defaults should be prevented. If the institutional loopholes cannot be mended, new defaults will occur while the old ones are being paid. In this instance, migrant workers' rights and interests still cannot be guaranteed and the regular market order cannot be kept. Thus it is profoundly important to establish a long-term mechanism.

Institutional construction is an important issue. When there are disputes that cannot be solved according to existing laws and regulations, we amend legislation. When crises like SARS and Bird Flu strike, we make emergency plans. Actually appendices and emergency plans are just remedial measures taken after we have already paid a dear price. We need to learn from these lessons and enhance the overall institutional structure.

For example, if the government cannot increase the input to the public health service, then the hospitals' zeal for profits cannot be rooted out and citizens will still find it difficult to afford medical treatments. If the educational department cannot solve the issue of imbalanced educational resources then parents and students' determination to select schools cannot be diminished. If illegal small mines cannot be closed, the regularity of accidents cannot be slowed.

Compared with taking remedial measures, it is difficult to take preventative institutional construction. Preventative work may not bring immediately visible benefits and needs great efforts to be taken. In a word, institutional construction tests the ability and wisdom of the government.

(China Daily August 7, 2006)