Guangzhou Daily recently reported that the government run social security system in half of the provinces has lost money. In addition, actual earnings of the social security funds are drastically below the rate of inflation. The Ministry of Human Resources and Social Security has published statistics that show the loss of social security funds in 14 provinces totaled 67.9 billion yuan (US$10.74 billion) in the year 2010. According to the rules set by the State Council, these funds can only be saved in banks or invest in bonds. Dai Xianglong, Chief of National Social Security Funds, commented recently that it might be a better idea for the social security system not to exist because expectations might be too high compared to the actual amount of money a person might receive if he needed it.
Source: Guangzhou Daily, December 26, 2011
http://gzdaily.dayoo.com/html/2011-12/26/content_1570672.htm