By Hu Yinan (China Daily/Xinhua)
Updated: 2007-09-24 07:10

A senior Chinese official on Saturday urged accelerating the building of a social security system that covers both urban and rural areas, noting that this is important for achieving sustainable economic and social development.

Addressing the opening ceremony of the China Social Security Forum in Beijing, State Councilor Hua Jianmin called for paying attention to the welfare and interests of both this and future generations.

China's social security system, which used to be completely State-financed, is now jointly financed by the State, institutions and individuals, said Hua, who is also secretary-general of the State Council.

Hua added that the establishment of a long-term mechanism, and improvements in the management and supervision of social security funds are also required.

China's attempt to create a unified social security system is an important measure for its large rural population and pool of migrant workers, who have contributed significantly to the country's economic growth, said Serge Abou, ambassador of the European Union (EU).

Last April, China and the EU launched a five-year project on social security reform, to which both sides have already contributed 20 million euros each.

However, such efforts face a number of problems, including the challenge of further urbanization, according to Cheng Siwei, vice-chairman of the Standing Committee of the National People's Congress.

"Of China's 780 million-strong workforce, 480 million are in urban areas, where coverage is improving. But in contrast, only parts of the developed countryside provide pensions," he said.

Khalid Malik, the United Nations' resident co-coordinator in China, also called for nations "to learn from and as well as contribute to" China's social security system.

Government expenditure in setting up a rural social security network has increased markedly in recent years.

For example, State expenditure on the new rural cooperative healthcare system increased from 400 million yuan ($53.3 million) in 2003 to 11.4 billion ($1.5 billion) this year. Over the same period, rural medical relief funds were also boosted from 300 million yuan ($39.9 million) to 1.32 billion ($176 million).

In addition, the coverage of minimum allowance mechanisms, which already cover over 25 million rural poor and 22.36 million urban residents, has continued to grow.

By last year, the total income of five social insurance funds for the elderly, the sick, the unemployed, those suffering from work-related injuries and pregnant women reached 862.6 billion yuan ($115 million).

But even in urban areas, only 43 percent of the 283 million employees had basic medical insurance.