ADB People's Republic of China Old-Age Pensions for the Rural Areas: From Land Reform to Globalization

The findings, interpretations, and conclusions expressed in this study are entirely those of the authors and do not necessarily represent the views of the Asian Development Bank or those of its member governments. The Asian Development Bank does not guarantee the accuracy of the date included in this publication and accepts no responsibility whatsoever for any consequences of their use. In this publication, the term "country" does not imply any judgment by the Asian Development bank as the legal or other status of any territorial entity. FOREWORD The Asian Development Bank (ADB) has financed several technical assistance projects to help the People's Republic of China (PRC) in reforming its social security system and strengthening institutional capabilities. The State Development Planning Commission, the country's primary economic planning agency, requested ADB's assistance to develop a comprehensive social security reform program to support the preparation of the Tenth Five-Year Plan (2001-2005). The Plan called for the development of a multi-pillared social security system covering both urban and rural areas. The technical assistance study examined options and strategies for introducing unified pension and medical insurance schemes in rural areas. The studies were conducted during March-July 2001. Overall strategic direction and supervision of the study was provided by Ms. Financial Economist of the same division. Two reports for rural pension and rural medical insurance were prepared. A workshop was organized jointly by ADB and the State Development and Planning Commission on 9-10 July 2001 in Beijing to discuss draft final reports. The process of economic restructuring has affected both the level of rural incomes and rural and urban income differences. The rural pension report provides an analysis of issues ranging from economic, demographic and urbanization to experiences of pilot rural schemes and rural pension administration both at central and local government levels. The report highlights that one of the major issues impeding the development of rural pensions is the absence of a supportive policy and institutional framework. The traditional arrangements for old age protection, mainly in the form of family support and land, are increasingly becoming less dependable. At the same time, new arrangements such as basic pension schemes and commercial insurance are not yet developed in rural areas. The report argues that because of increased labor mobility and erosion of the distinction between rural and urban populations, there is a need for a national pension scheme covering both urban and rural areas. A phased …