Welfare in China

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Social welfare in China has undergone various changes throughout history. The Ministry of Human Resources and Social Security is responsible for the social welfare system.

Welfare in China is linked to the hukou system. Those holding non-agricultural hukou status have access to a number of programs provided by the government, such as healthcare, employment, retirement pensions, housing, and education. While rural residents traditionally were expected to provide for themselves, [1] in 2014 the Chinese Communist Party announced reforms aimed at providing rural citizens access to historically urban social programs. [2]

In pre-1980s reform China, the socialist state fulfilled the needs of society from cradle to grave. Child care, education, job placement, housing, subsistence, health care, and elder care were largely the responsibility of the work unit as administered through state-owned enterprises and agricultural communes and collectives. As those systems disappeared or were reformed, the "iron rice bowl" approach to welfare changed. Article 14 of the constitution stipulates that the state "builds and improves a welfare system that corresponds with the level of economic development."

In 2004 China experienced the greatest decrease in its poorest population since 1999. People with a per capita income of less than 668 renminbi (RMB; US$80.71) decreased by 2.9 million people or 10 percent; those with a per capita income of less than 924 RMB (US$111.64) decreased by 6.4 million people or 11.4 percent, according to statistics from the State Council’s Poverty Reduction Office. [3]

Welfare reforms since the late 1990s have included unemployment insurance, medical insurance, workers’ compensation insurance, maternity benefits, communal pension funds, individual pension accounts, universal health care. [4]

Furthermore, for many of the minority groups, there are some benefits available. [5]

During July 2020, Beijing social security center put restrictions on the social security withholding and payment, which was allowed to be operational previously via third party organizations. [6] [7]

The Chinese retirement system has broad coverage, with almost 70% of urban residents covered by either the urban or rural pension plans as of 2022. [8] :202 However, it is not sufficiently funded to provide more than small benefits. [8] :202

Corporate Social Responsibility (CRS)

Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. In China, CRS is an important measure that the central government uses to evaluate performance of local government. Local firms may strategically add CRS to build good relationships with local government. The theory of resource dependence suggests, firm behavior is profoundly affected by the government because of its control over critical external resources (Pfeffer and Salancik, 1978). Moreover, based on the principle of reciprocity in social exchange theory (Gouldner, 1960; Blau, 1964), governments and businesses may embark on resource exchange when they realize their goals are cooperative. The existing literature has found that companies that increase their investment in social responsibility may increase financial benefits and direct value to stakeholders (Orlitzky et al., 2003; Kopel and Brand, 2012; Lambertini; Tampieri, 2015; Nollet et al., 2016; Shen et al., 2016). Corporate strategic management of relationships with governments can bring advantages in terms of market competition (Schuler et al., 2002; Hillman et al., 2004; Yang et al., 2019). Therefore, the promotion incentives of local government officials may motivate firms to improve their social responsibility performance as a strategy to obtain more political resources. [9]

See also

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<span class="mw-page-title-main">Welfare state</span> Form of government

A welfare state is a form of government in which the state protects and promotes the economic and social well-being of its citizens, based upon the principles of equal opportunity, equitable distribution of wealth, and public responsibility for citizens unable to avail themselves of the minimal provisions for a good life.

<span class="mw-page-title-main">Welfare spending</span> Means-oriented social benefit

Welfare spending is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifically to social insurance programs which provide support only to those who have previously contributed, as opposed to social assistance programs which provide support on the basis of need alone. The International Labour Organization defines social security as covering support for those in old age, support for the maintenance of children, medical treatment, parental and sick leave, unemployment and disability benefits, and support for sufferers of occupational injury.

Welfare reforms are changes in the operation of a given welfare system aimed at improving the efficiency, equity and administration of government assistance programs. Reform programs may have a various aims, sometimes the focus is on reducing the number of individuals receiving government assistance and welfare system expenditure, at other times reforms may aim to ensure greater fairness, effectiveness and allocation of welfare for those in need. Classical liberals, libertarians, and conservatives generally argue that welfare and other tax-funded services reduce incentives to work, exacerbate the free-rider problem, and intensify poverty. On the other hand social democrats and socialists generally criticize welfare reforms that minimize the public safety net and strengthens the capitalist economic system. Welfare reform is constantly debated because of the varying opinions on a government's need to balance providing guaranteed welfare benefits and promoting self-sufficiency.

<span class="mw-page-title-main">Payroll tax</span> Tax imposed on employers or employees

Payroll taxes are taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their employees. By law, some payroll taxes are the responsibility of the employee and others fall on the employer, but almost all economists agree that the true economic incidence of a payroll tax is unaffected by this distinction, and falls largely or entirely on workers in the form of lower wages. Because payroll taxes fall exclusively on wages and not on returns to financial or physical investments, payroll taxes may contribute to underinvestment in human capital, such as higher education.

Hukou is a system of household registration used in mainland China. The system itself is more properly called "huji", and has origins in ancient China; hukou is the registration of an individual in the system. A household registration record officially identifies a person as a permanent resident of an area and includes identifying information such as name, parents, spouse and date of birth. A hukou can also refer to a family register in many contexts since the household register is issued per family, and usually includes the births, deaths, marriages, divorces, and moves, of all members in the family.

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Many both in and outside Japan share an image of the Japanese work environment that is based on a "simultaneous recruiting of new graduates" and "lifetime-employment" model used by large companies as well as a reputation of long work-hours and strong devotion to one's company. This environment is said to reflect economic conditions beginning in the 1920s, when major corporations competing in the international marketplace began to accrue the same prestige that had traditionally been ascribed to the daimyō–retainer relationship of feudal Japan or government service in the Meiji Restoration.

Social welfare in Sweden is made up of several organizations and systems dealing with welfare. It is mostly funded by taxes, and executed by the public sector on all levels of government as well as private organizations. It can be separated into three parts falling under three different ministries. Social welfare is the responsibility of the Ministry of Health and Social Affairs. Education is the responsibility of the Ministry of Education and Research. The labour market is the responsibility of the Ministry of Employment.

<span class="mw-page-title-main">Italian welfare state</span> Italian social policies

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<span class="mw-page-title-main">Urbanization in China</span> Overview of urbanization in China

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Internal migration in the People's Republic of China is one of the most extensive in the world according to the International Labour Organization. This is because migrants in China are commonly members of a floating population, which refers primarily to migrants in China without local household registration status through the Chinese Hukou system. In general, rural-urban migrants are most excluded from local educational resources, citywide social welfare programs and many jobs because of their lack of hukou status. Migrant workers are not necessarily rural workers; they can simply be people living in urban areas with rural household registration.

Social security in the People's Republic of China consists of two systems: one for urban workers in the formal sector and one for rural farmers and nonworking urban residents. The systems have different benefits and are funded differently. The urban system is the largest component of China's social security, and it includes both a social pooling account and mandatory individual accounts. In the less developed rural program, old farmers receive a small pension financed by general fiscal revenue and young farmers make small contributions to their individual social security accounts.

<span class="mw-page-title-main">Poverty in China</span>

In China today, poverty refers mainly to the rural poor. Decades of economic development has reduced urban extreme poverty. According to the World Bank, more than 850 million Chinese people have been lifted out of extreme poverty; China's poverty rate fell from 88 percent in 1981 to 0.7 percent in 2015, as measured by the percentage of people living on the equivalent of US$1.90 or less per day in 2011 purchasing price parity terms, which still stands in 2022.

<span class="mw-page-title-main">Ministry of Civil Affairs</span> Chinese governmental institution

The Ministry of Civil Affairs the cabinet-level executive department of the State Council of China which is responsible for social and administrative affairs. It is the 10th-ranked department in the State Council. It was founded in its current form in May 1978, and the current minister is Lu Zhiyuan.

Welfare in France includes all systems whose purpose is to protect people against the financial consequences of social risks.

<span class="mw-page-title-main">Social programs in the United States</span>

In the United States, the federal and state social programs including cash assistance, health insurance, food assistance, housing subsidies, energy and utilities subsidies, and education and childcare assistance. Similar benefits are sometimes provided by the private sector either through policy mandates or on a voluntary basis. Employer-sponsored health insurance is an example of this.

<span class="mw-page-title-main">Labor relations in China</span>

As the economy of China has rapidly developed, issues of labor relations have evolved. Prior to this reform, Chinese citizens were only allowed to work where they originated from. Since 1978, when China began labor force reforms, the overwhelming majority of the labor force were either working at State owned enterprises or as farm workers in the rural countryside. However, over time China began to reform and by the late 90's many had moved from the countryside into the cities in hopes of higher paying jobs and more opportunities. The only connection between the countryside and the city soon became that there was a huge floating population connecting them. Independent unions are illegal in China with only the All-China Federation of Trade Unions (ACFTU) permitted to operate. China has been the largest exporter of goods in the world since 2009. Not only that, in 2013 China became the largest trading nation in the world. As China moved away from their planned economy and more towards a market economy the government has brought on many reforms. The aim of this shift in economies was to match the international standards set by the World Trade Organization and other economic entities. The ACFTU that was established to protect the interests of national and local trade unions failed to represent the workers, leading to the 2010 crackdowns. However, these strikes were centered around foreign companies.

<span class="mw-page-title-main">Welfare in Finland</span> Overview of welfare in Finland

Social security or welfare in Finland is very comprehensive compared to what almost all other countries provide. In the late 1980s, Finland had one of the world's most advanced welfare systems, which guaranteed decent living conditions to all Finns. Created almost entirely during the first three decades after World War II, the social security system was an outgrowth of the traditional Nordic belief that the state is not inherently hostile to the well-being of its citizens and can intervene benevolently on their behalf. According to some social historians, the basis of this belief was a relatively benign history that had allowed the gradual emergence of a free and independent peasantry in the Nordic countries and had curtailed the dominance of the nobility and the subsequent formation of a powerful right wing. Finland's history was harsher than the histories of the other Nordic countries but didn't prevent the country from following their path of social development.

<span class="mw-page-title-main">Pension policy in South Korea</span>

South Korea's pension scheme was introduced relatively recently, compared to other democratic nations. Half of the country's population aged 65 and over lives in relative poverty, or nearly four times the 13% average for member countries of the Organisation for Economic Co-operation and Development (OECD). This makes old age poverty an urgent social problem. Public social spending by general government is half the OECD average, and is the lowest as a percentage of GDP among OECD member countries.

References

  1. Young, J. (2013). Ch. 2. In China's Hukou System: Markets, Migrants and Institutional Change (pp. 27-64). New York, NY: Palgrave MacMillan.
  2. Chan, K. W. (2015). Five Decades of the Chinese Hukou System. In Handbook of Chinese Migration: Identity and Wellbeing (pp. 23-47). Northampton, MA: Edward Elgar Publishing, Inc.
  3. Inc, IBP (2013-04-04). China Labor Laws and Regulations Handbook Volume 1 Strategic Information and Basic Laws. Lulu.com. ISBN   978-1-4387-8054-2.{{cite book}}: |last= has generic name (help)
  4. "The long march to universal coverage: lessons from China" World Bank, January 2013
  5. Sautman, p. 77. Three principles are the basis for the policy: equality for national minorities, territorial autonomy, and equality for all languages and cultures.
  6. "Beijing Tightens Social Insurance Filing Services by Third-Party HR Agency". China Briefing News. 2020-08-13. Retrieved 2020-12-16.
  7. "Beijing Cancels Social Security Withholding & Payment Business". HROne. 2020-07-21. Retrieved 2020-12-16.
  8. 1 2 Roach, Stephen S. (2022). Accidental Conflict: America, China, and the Clash of False Narratives. New Haven: Yale University Press. ISBN   978-0-300-26901-7. OCLC   1347023475.
  9. Kong, Dongmin; Cheng, Xu; Jiang, Xiandeng (2021-02-01). "Effects of political promotion on local firms' social responsibility in China". Economic Modelling. 95: 418–429. doi: 10.1016/j.econmod.2020.03.009 . ISSN   0264-9993.