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People’s Daily: People’s Misunderstanding about Social Security Is Worrisome

On January 10, 2015, People’s Daily published an article titled, “Social Security Is Not a Panacea.” On January 23, 2015, People’s Daily republished the article on its website, The article told the Chinese people not to rely on the government’s social security and to get prepared for their retirement with funds resulting from their own efforts. According to the article, 40 to over 50 percent of an average Chinese person’s income is contributed to social security. The rate of the contribution is rising every year. Some people decided not to contribute anything to social security because they cannot afford the high payment. To solve the problem of the increasing rate of the social security contribution, the article gave possible solutions, one of which is to require 100 million uninsured workers to participate in social security contributions.

In 2013, the income to China’s social security fund could not cover the expenditures in 19 provinces. The fund had a total of revenue shortfall of 170.2 billion yuan (US$27.19 billion). Many other provinces could maintain a normal income-expenditure fund cycle only with the help of the central government’s financial support. “As prices are so high, the 70 yuan per month basic social security retirement allowance can only be used as pocket money.” “With the year by year price increase, a couple of thousand yuan per month in corporate pension is very tight for a retirement life.” [Editor’s note: Milk costs between 10 and 16 yuan per liter; a 500g Loaf of fresh white bread costs between 7 and 15 yuan.] However, what worries the government even more is the Chinese people’s “misunderstanding,” that “Social Security Is a Panacea.” Giving North America and Europe as examples, the article said that enterprises and individual citizens should take the major responsibility for their own retirement funds.

Source: People’s Daily and, January 23, 2015