Township Workers Also Need Pensions

By: Unknown
China Daily, January 21, 2000

Senior officials and experts agreed yesterday at an international seminar in Beijing that China needs to establish a nationwide pension system for its large number of employees working for township enterprises.

The government enforced its pension system throughout the urban population last year, but left 125 million employees working for 20 million township enterprises at the end of 1998 still uncertain if a strong pension system was in place, they said.

"The development of township industries inevitably calls for the establishment of a pension system for their employees," Liu Yazhi, vice-minister of the Ministry of Labour and Social Security, said at the seminar co-sponsored by the ministry and the France-based insurer CNP Assurances.

Since the mid-1980s, the township industry has become an important part of the Chinese economy, making up 28 per cent of the gross domestic product at the end of 1998 and employing one-third of the rural labour force.

Although township enterprises in some developed areas are leading the pack when it comes to pension reforms for their staff, "the implementation of a modernized pension system for the elderly could increase the further development of township enterprises," the official said. "They also face the risks of a market economy, and their rights should also be protected," she added.

She said this has been an important issue on the ministerial agenda since 1998 and last year her office started working with CNP Assurances, France's biggest life insurer, to solve the problem.

Gilles Benoist, president of CNP which plans to apply for an operating licence in China, lauded the government's efforts in pushing for pension reform, but cautioned against becoming lax about providing the minimum subsistence levels to township employees and emphasized that financial burdens on enterprises should not be increased.

The president said the conflicts between better social security for employees and increasing the competitiveness of enterprises were particularly obvious in China because the percentage of the elderly as part of the population is increasing.

Wang Yicai, director of the Rural Social Insurance Department of the ministry, said China's township enterprise pension system should be funded by employees and enterprises with policy support from the State.

He said the system must be in line with the urban pension system to ensure the integrity of the labour market.