Authorities have cracked down on a raft of social insurance fund embezzlement cases in the first six months of the year, Xinhua News Agency has reported.

Although the report did not give the total figure of embezzled funds or cases, the largest case involved officials in Qingshen County in Sichuan's Meishan, who pocketed 12 million yuan (US$1.5 million).

In Puyang, Henan Province, the local labour and social security bureau exempted enterprises from more than 8.7 million yuan (US$1 million) of social insurance funds in exchange for six sedan cars.

Another local authority in Heilongjiang Province offered illegal loans of 9 million yuan (US$1.1 million) from social insurance funds to factories, while the Wenzhou bureau of labour and social security in Zhejiang Province embezzled 6 million yuan (US$750,000) for stock trading.

Currently most of the misused funds have been recovered, Xinhua said, and officials involved have been punished.

The news was released at a national conference on surveillance of the social insurance system held recently in Changchun, capital of Jilin Province in Northeast China.

The Ministry of Labour and Social Security has set up a special group to check the collection, payment and management of social insurance funds, Xinhua said, in an attempt to curb frequent abuse.

As of last year, 173 million people were covered by pension insurance, 137 million by basic medical insurance, and 106 million by unemployment insurance, ministry figures showed.

The country's social insurance funds are increasing at an annual rate of 20 per cent, hitting 1.84 trillion yuan (US$227.3 billion) last year, equivalent to 10 per cent of the country's gross domestic product.

(China Daily 08/22/2006 page2)