Setting Up an Integrated Social Security System

As part of its plan to establish a harmonious society, the Chinese Communist Party has resolved to establish by 2020 a social security system covering both urban and rural populations. A common assumption is that the integrated system would provide to the whole population the same high level of protection that a section of the urban population currently enjoys. This article will provide an overview of the current situation and consider the prospects for the establishment of such a system by 2020. The aim is ambitious and the time available for achieving the target is very limited. However, two of the principal pre-conditions for achieving the target are present. First, there has been a dramatic improvement in public finances and the trend looks likely to continue. The implication is that the government would be increasingly capable of covering the extra cost of setting up an integrated social security system. Second, the leadership is strongly committed to establishing such a system. Yet a seamless and fully operational system is highly unlikely.