China has achieved great economic development since the reform and open policy was launched. People's living standards have been raised considerably. At the same time, the lag of matching improvement in social fields have created some new social problems, which may block the economic construction and became the bottleneck of social development if unsettled in good time. Social security problem is one of them.

　　"China becomes old." The aging problem gradually calls people's attention. It is reported that the population of citizens aged above 60 in Shanghai has reached 2.5 million and accounts for 18.5% of the total population. Statistics show that the number of people older than 60, which accounts for more than 10% of the country's total population, is increasing at a rate of 3.2% a year. The population aging problem brings various social and economic problems to China, which is now still a developing country. How to better support the country's 132 million elderly has become a big challenge for China.

　　Such a rise has spotlighted the need for more attention to elderly people's needs. More than 70% of seniors are financially supported and looked after by their sons and daughters; only less than 17% of them enjoy pensions. 70% of seniors are concentrated in rural areas and almost wholly depend on support from their children because of the lack of a social welfare system for people in rural regions. Fewer children have been born these years, so the social security system should be improved as soon as possible. China aims to gradually set up a series of networks for the aged, including social endowment assurance and a looking-after service, by 2010. The central government will therefore do more to create a better living environment for them. It will be practical for China to support its ageing population through a combination of family and a modern pension system.

　　Unemployment and poverty are also included in the social security issue. China so far has over 6 million laid-off workers and 20-30 million urban citizens living in poverty. Poverty in urban areas has become a big problem haunting reform and social stability, said CPPCC member Wang Daming. Apart from the urban poor, the nearly 100 million migrant workers, who come from rural areas to work in the cities, are also included in the disadvantaged group. These people's hard living conditions are of great concern to deputies of the Ninth National People's Congress (NPC) as well as members of the Chinese People's Political Consultative Conference (CPPCC).

　　According to the current practice in China, both employers and employees should pay social insurance premiums, which are to be put in the personal account of employees. But in many cases this is simply not being done. Many enterprises -- most of which are debt-ridden State-owned enterprises, township enterprises, share-holding companies and private firms -- refuse to provide social security benefits to their employees. Lack of funds has become one of the biggest problems for the social security work. Furthermore, social unrest may worsen if the government not to take effective measures to help the poor and the disadvantaged.

　　According to premier Zhu, the urban social security system needs to be further improved. The most pressing task is to ensure that subsistence allowances for laid-off workers from state-owned enterprises and basic pensions for retirees are paid on time and in full. "We will not allow new arrears to occur anywhere. We need to improve the unemployment insurance system. At the same time, we need to strengthen the system of subsistence allowances for urban residents, so that all eligible poor urban residents will have their essential needs met. We also need raise the basic wages and salaries of employees in government departments and institutions and the pensions of their retirees. Enterprises under all forms of ownership also should appropriately increase the wages and salaries of their employees on the basis of improved economic performance. Wages and salaries that are in arrears must be paid as soon as possible."

　　In practice, China did putsintosa lot money and human resource during the past years. Both the central and local governments greatly increased their expenditures on social security.

　　China has launched pilot projects in Liaoning Province and in some cities of other provinces and autonomous regions to improve the social security system in urban areas and to replace administrative charges with taxes in rural areas. Reform of the basic medical insurance system for urban employees, the medical and public health systems, and the system for producing and distributing medicines progressed steadily.

　　In Xiang Huaicheng, the finance minister' budget report, he mentioned: "Social security expenditures continued to increase and the social security system was gradually improved. In recent years, expenditures in the central budget for social security programs have increased considerably to implement policy decisions made by the Party Central Committee. Expenditures in the central budget for social security programs in 2001 totaled 98.2 billion Yuan, 5.18 times the figure for 1998. This figure includes 34.9 billion Yuan to subsidize the old-age insurance fund, 13.6 billion Yuan for subsidies to provide basic living allowances for laid-off workers from state-owned enterprises, 2.3 billion Yuan for subsistence allowances for urban residents, 31 billion Yuan to replenish the national social security fund and 8.4 billion Yuan for benefits for some disabled servicemen and family members of revolutionary martyrs and for social welfare and relief funds. In addition to providing more funding for social security programs, a special social security account has been set up in the budget to provide extra funding for special purposes."

　　We have reasons to believe that China's social security system will make a great progress in the near future.

　　BACKGROUND

　　The social security system mainly includes four factors namely, social insurance, social almsgiving, compensating and aftercare.

　　China aims to build the world's largest social security network. Premier Zhu said in his government report the social security work remains a key work in the coming years. He said a sound social security system is an important pillar of the country's socialist market economy system. The central government regards social security work as the "lifeline" of the country.