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China to boost spending on welfare, medicare

(Xinhua)
Updated: 2009-03-05 09:27

The Chinese government pledged on Thursday to increase spending on social programs including pension and medical reform in 2009 despite pressure from the international financial crisis.

"The more difficulties we face, the greater attention we should pay to ensuring people's well-being and promoting social harmony and stability."according to a government work report to be delivered by Premier Wen Jiabao to the annual session of the parliament that will open in Beijing Thursday.

The central government plans to spend 293 billion yuan ($42.84 billion) on the social safety net this year, up 17.6 percent or 43.9 billion yuan over the estimated figure for last year, reads the report distributed to the media before the opening of the 11th National People's Congress.

"Local governments will also increase funding in this area," the report says.

The fund will help "expand coverage of social security programs" and "increase social security benefits" of the Chinese, according to the report.

The government will allocate an additional 850 billion yuan in the three years beginning on 2009, including 331.8 billion yuan from the central government, to ensure smooth progress in the reform of its medical and health care system, the report says.

"We will continue to ensure that maintaining and improving people's lives is always the starting and end point of our economic work," it reads.

Economists said the lack of health insurance and social security is holding back China's economic development and the government's efforts to spur domestic demand, as people tend to clutch their purses tightly for unexpected disease, a laid-off, or old-age.

Migrants, farmers highlighted

The Premier vowed in the report to formulate and implement a method for old-age pensions for the country's 130 million rural migrant workers, and, at the same time, to introduce a method for transferring old-age pension accounts for workers moving from one region to another.

The government also aims to expand social security programs to cover more "employees in the non-public sector, rural migrant workers, and farmers whose land was expropriated".

Starting from this year, the government will introduce a new policy in all rural areas to subsidize hospitalized childbirth, provide regular prenatal checkups and postpartum visits for women, and monitor the growth of infants and toddlers less than three years of age to prevent birth defects, he said.

China has established several policies concerning social welfare since 1984. By 2008, about 219 million people have pensions and about 317 million have basic medical insurance. An additional 124 million have unemployment insurance, 138 million have work injury insurance and 91 million have childbirth insurance.

China has to invest 5.74 trillion yuan by 2020 in building an all-round social welfare system to enhance people's livelihood, according to the China Development Research Foundation, a government think tank.

The amount will cover all aspects including pension, education, health care, housing, employment and aid to rural residents and migrant workers, the foundation said in a report.

Spending in the next three years will top 2.6 trillion yuan, the report said.

The foundation's chairman Wang Mengkui said the social welfare system should keep pace with the the country's economic development, which was essential to "solve the problem" of the imbalance between urban and rural areas and among regions and to benefit the whole population.