Business
23:02, 31-Oct-2017
Reform in Action: Improving livelihood by revamping the social safety net
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The 19th Communist Party of China (CPC) National Congress report promised to lift everyone out of poverty by 2020, and stressed measures the government will be taking to improve people's livelihood.
One major issue for the nation at present is upgrading the existing pension system. The country’s elderly population is expected to reach 248 million or close to 20 percent of the overall population in less than three years, while ageing migrant workers also call for special considerations as they reach retirement age.
"Many workers in Shanghai are now migrants from other areas, but they pay their pensions here. They could be working in other cities in the future. So this requires our pension fund system and other social security systems to consider things from a national level," said Lu Hanlong, Researcher at Shanghai Academy of Social Science.
Local pension systems across the nation are now being interlinked, and some pension funds have been allowed to invest in the stock and bonds for higher yields than bank interests.
More diversified pension payment methods and commercial pension plans are taking shape as well.
The changing population structure is not the only factor that makes preparations for an aged society important.
Professor John Gong from University of International Business and Economics said that people’s mindset about retirement life is already changing.
"The elderly in China traditionally rely on their children to look after them, but that might not be the case in the future. I personally don’t expect my children to take care of me when I’m old. That’s why we need more institutional help," said Gong.
The Party congress report also named employment as a top priority in improving people’s livelihood. Policy makers must lift barriers that inhibit the market-oriented changes in the labor market.
This means that offering the same social welfare packages across cities large and small is vital, so that people will not be deterred from working in lower-tier cities and for private companies.
"We've observed that graduates are not only looking at foreign companies or state-owned companies, and many are entering domestic private enterprises as well, thanks to government policies that encourage innovation and entrepreneurship," said Song Jie, Sr. Consultant for G&E Human Resources Consulting Co., Ltd