Cash-for-needy program a world leader but more can be done on social protection

China has an unmatched record of achievement in alleviating poverty over the past 35 years - accounting for 72 percent of the global reduction in extreme poverty. At the United Nations General Assembly last month, President Xi Jinping reiterated China's ambitious targets to further reduce poverty, as 7 percent of the developing world's poor still live in China.

China's success in reducing poverty is the result of several factors, including strong economic growth, attention to antipoverty programs and improved access to social services and social protection. Establishing a comprehensive social protection system has played a key role in China's successful poverty reduction. The dibao program, which provides cash to China's needy, is the backbone of the system. It is also the largest program of its kind in the world.

It is thus no coincidence that almost 250 participants from 75 countries have been in Beijing to discuss social protection in an urbanizing world and to learn from China's success and more about its remaining challenges. The event offered an opportunity to discuss the role of social protection in urban areas - a dynamic and catalytic role that bolsters upward mobility through better access to safety nets, housing and jobs tailored to urban settings.

The urban dibao program was piloted in 1993 and expanded to all cities in China in 1999. By 2003, the program covered some 22 million urban residents. Workers laid off from state-owned enterprises and the unemployed accounted for more than two-fifths of the program's beneficiaries. Studies documented how the urban dibao program cushioned the effects of China's SOE reforms on workers. Today the focus of the urban dibao program has shifted to the elderly living in poverty, the working poor and low-income families with adult members with low skills, disabled or without a support network.

The rural dibao program was adopted nationwide in 2007, following years of piloting. The program has been scaled up from 36 million to 52 million beneficiaries between 2007 and today. The government's budget for the rural dibao program has increased dramatically, from 4 billion yuan ($629 million) in 2007 to 87 billion yuan this year, with the central government covering the majority of financing since 2009. This has allowed a five-fold increase in the average transfer amount to families, along with the vast expansion in coverage.

In recent years, China has further improved the program's governance. In 2011, the government standardized the criteria for determining eligibility and made the enrollment process more transparent. Since 2013, households have been able to apply for dibao directly, bypassing village and township officials. The government has also established auditing and eligibility cross-checking mechanisms. In terms of size, systems and sophistication, China's dibao program is comparable to the largest and successful cash-transfer programs in the world, such as Bolsa Familia in Brazil and National Rural Employment Guarantee Program in India.

In addition to the dibao program, China's social protection system stands out for the extraordinary expansion of its social insurance programs. China's innovative pension systems for rural and urban residents have grown rapidly, expanding the coverage of informal sector workers from about 50 million in 2008 to nearly 500 million this year, which represents the fastest expansion in social insurance globally. Old-age insurance programs now reach more than 80 percent of China's population, and almost all Chinese have medical insurance. Meanwhile, geography-based rural poverty reduction programs continue to play an active role in reducing rural poverty.

While still a work in progress, the building blocks for a robust social protection system can continue to be consolidated in the coming years. Under the new normal of slower economic growth, we believe it is critical for the government to continue to strengthen the dibao program in the 13th Five-Year Plan (2016-20) and take new measures to lift the remaining poor out of poverty.

The author is the World Bank country director for China. The views do not necessarily reflect those of China Daily.