By Han Jun, Qin Zhongchun & Cui Chuanyi, Research Department of Rural Economy

Research Report No. 002, 2006

I. Developing Rural Social Security System Constitutes an Important Condition for Constructing a Harmonious Society in China

Rural social security system is a system established at a specific stage of social development with rural residents as the insured subjects and social security beneficiaries. Rural residents refer to farmer workers, farmers who have lost land, ordinary farmers, rural households with economic hardship, rural households in severe poverty, and households enjoying the five guarantees (childless and infirm old people whose food, clothing, medical care, housing and burial expenses are taken care of and subsidized by the government.). Rural social security system usually includes the minimum subsistence allowances for poverty-stricken farmers, old-age pension system for ordinary farmers, social security for farmers who have lost land and for farmer workers, and rural social relief system. Nowadays with the diversification of farmers' identity and changes in the social and economic conditions, the mode and content of rural social security system will also experience significant transformation. Developing rural social security system, integrating it organically with urban social security system, and gradually perfecting the two and establishing a united social security system with both have become the inevitable course for China in the process of coordinating urban and rural development and constructing a harmonious society.

1. Developing rural social security system provides conditions for the promotion of social fairness

One of the important bedrocks of socialist harmonious society is the equality of rights and opportunities, which include equal opportunities for employment and education, equal business and financing opportunities, equal rights for income and equal rights and interests for social security. For a long time, China's standard social security system only covers part of urban residents of government sectors of the society, whereas a huge number of farmers are beyond coverage. There is a wide gap between urban and rural social security. Even till today, most rural households still seek “self-security” from family, at most from the collectivity. As China enters a transitional period from an agricultural society to an industrial society, the mobility in the society has remarkably increased. Such growing mobility leaves urban and rural residents unable to rely solely on traditional families. Particularly in rural areas, in view of the development tendency, it is imperative to provide a large number of farmers with equal opportunities and rights through a social security system, which poses a major challenge in front of us. Besides, China is gradually turning into an aging society. According to the data of China 5th Population Census conducted in 2000, the number of elderly over 60 has exceeded 10% of the total rural population, 1.24 percentage points higher than that of urban areas. China has become an aging society, with the number of the aged growing 3.3% year by year. To lessen the tremendous social and economic pressures brought about by the peak of aging, it is necessary to develop rural social security system.

2. Developing rural social security system provides conditions for driving the constructions of social safety and legal system

As the industrialization and urbanization proceed, China has entered a phase when various social contradictions become exposed and a variety of problems and conflicts arise to be solved urgently. The first issue is the implementation of the only-child policy. Those rural people who were earliest to carry out the family planning policy have now entered their old age in succession, and the ever more prominent phenomenon of more old people and less young people has altered the traditional model of family-based old-age care, under which rural people usually bring up children for the purpose of being looked after in their old age. The problem of providing for the old, if not properly handled, will shake the mass foundation for the current family planning policy. The second issue is related to farmer workers. China now has over 120 million farmer workers working in cities, for whom the income is low, the employment unstable and the mobility high. Thirdly, 138 million employees work in township enterprises and small and medium-sized enterprises, whose employment conditions are unstable, and have not been completely covered by social security system. Fourthly, the number of farmers whose land has been expropriated has exceeded 40 million. Most of them, unable to seek regular employment after losing their land, have become the vulnerable group in the face of a great many of social risks. Fifthly, every year in rural areas there are about 70 million victims of various disasters and over 76 million populations in extreme poverty or with low income in need of relief. Developing social security system can help reinforce social administration and control, safeguard the rights and interests of farmers and disadvantaged groups, embody social humanistic concern and build up an overall social security network.

3. Developing rural social security system provides conditions for advancing coordinated development and bridging the gap between urban and rural areas

The uneven development between urban and rural areas has always been an outstanding contradiction in China's economic and social development. In view of international experience and the general rule of social security development, when social and economic development has reached certain levels, we can expedite the development of the basic system of rural old-age pension and reduce the gap between urban and rural areas and promote coordinated development between them by means of adjusting national income distribution. Currently, China has already entered a stage in which industries promote the development of agriculture and urban areas drive the development of rural areas. We must thus accelerate the development of rural social security system, ease social contradictions through system and mechanism construction, increase farmers' incomes and heighten their living standards. The year 2005 recorded 18.23 trillion yuan of GDP and 3.16 trillion yuan of financial revenue, which means China has primarily laid the material foundation for industry to feed back agriculture and for urban areas to support rural areas. Developing rural social security system will provide crucial conditions for advancing coordinated development and filling the gap between urban and rural areas.

II. The Status Quo and Main Features of Rural Social Security System in China

In the initial period after the founding of new China, the primary task of the Party and the Government was to press forward rural land reform so as to ensure farmers to have their own land and to carry out a system in rural areas with family security as the dominant form of social security with appropriate support by the government and local communities. Since the implementation of agricultural cooperatives till the 3rd Plenary Session of the 11th CPC Central Committee, the state adopted a planned economic administration system and practiced collective security with certain support by the government. No independent social security system emerged or developed until 1978. Since then, much attention has been attached to poverty elimination work and great achievements have been made in this field. In the meanwhile, rural grassroots social security framework has been initially established. However, generally speaking, a complete system framework has not taken shape; some major programs of social security are still under exploration. The status quo and main features of rural social security system in China are as follows:

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