The welfare of millions of mortal beings now enjoys top priority
on the government agenda.
The matter involves employment, social security, healthcare,
housing, communication, food safety, education and the environment.
All these are directly connected to the country's undertaking of
building a harmonious society.
These issues cannot be entirely left to the mercy of market
forces. Instead, the tangible hand of the government is needed.
In the planned-economy era, we had a big government that
concentrated everything in its hands, ranging from State affairs to
minor things concerning ordinary people's everyday life.
The all-encompassing government began to transit to a limited
one after the reform and opening-up were launched in the late
1970s, disengaging from sectors and affairs that should be governed
by market mechanisms.
In the course of transition, however, the government became
absent where its presence is needed, such as matters involving
social justice. At the same time, it remains involved in affairs
and sectors where its presence should be replaced by market
mechanisms.
Establishment of a complete social security system guarantees
social justice and stability. The social security system is
supposed to cover all members of society, offering them healthcare,
pensions and, in turn, real security.
Compulsory, equal, and universal coverage are the most salient
features of the social security system.
However, differentiations exist between the urban and rural
populations, between regular urban workers and migrant workers and
between different localities in terms of social security coverage,
a situation we have inherited from past practices.
Serious dislocations, therefore, exist in the social security
system, taking into account that the majority of China's 1.3
billion population live in the countryside, including the millions
who are working as migrant workers in urban areas.
By the end of last year, 186.49 million urban and township
people were covered by pension insurance, 157.37 million urban and
township people were under the umbrella of healthcare insurance,
and 111.87 million urban and township people were covered by
unemployment insurance.
The majority of the population still remain outside the social
security system, which means we still have a long way to go to
build up a universally inclusive social security system.
Apart from this, education, public hygiene, environmental
protection and employment are all vitally important issues
involving ordinary people's livelihood.
To run an effective social security system needs huge sums of
money, people often claim. But it is more important that we use the
money efficiently.
Among all the expenditures of the government, spending on public
services and social welfare is only 25 percent, in contrast with 75
percent in the US.
In view of this, spending on running the government and on
economic activities need to be reduced and expenditures on public
services ought to be largely increased.
In particular, the money used on travel at public cost, on
public vehicles and feasting at public expense must be brought down
by large margins.
The money sheared off from this kind of spending needs to be
channeled into public-service undertakings to address the vitally
important issues involving the lives of more than 1 billion mortal
beings.
At present, many local governments, especially those in
poverty-stricken areas, feel keenly that their financial strength
in no way matches their attempt to set up a social security
infrastructure.
This is because the existing tax and finance systems were
originally designed to encourage the localities to promote their
economies, instead of being geared to addressing matters involving
people's livelihood.
As a result, the financial strength of poor areas is sapped or
remains weak. To redress the situation, the central and provincial
governments should take up tasks such as building up social
security systems through transfer payments to counties and
towns.
At the same time, we should realize that boosting employment is one
of the best ways to improve people's welfare. Realignment of
employment policies is called for.
First, control on setting up small businesses should be
liberalized. No registration procedure should be required to start
a tiny business. Filing a record for reference is quite enough.
At the same time, all kinds of irrational fees levied on tiny
business proprietors ought to be scrapped.
Finally, it should be made easier for small- and medium-sized
enterprises to get bank loans.
Zhou Tianyong is a professor with the Party School of the
Central Committee of the Communist Party of China; Hu Feng is a PhD
candidate at the school
(China Daily March 13, 2007)