In a recent forum, Yin Weimin, Minister of Human Resources and Social Security, discussed four main weaknesses of China’s current Social Security System: (1) elderly unemployed city residents don’t enjoy any pension or monetary protection; (2) the aging traditional pension system still covers the government system and public institutions; (3) there is a lack of smooth connections between various social security related systems; (4) supplementary social protection systems are under very slow development and do not satisfy diverse market needs.

Yin suggested that a sound social security system is urgently needed for sustainable social development. The biggest unfairness is the fact that a large chunk of the population lacks basic social protection arrangements.

Source: Xinhua, August 23, 2010
http://news.xinhuanet.com/2010-08/23/c_12474383.htm

At the end of June, 2010, China had $2.4543 trillion in foreign exchange reserves. On August 24, 2010, China Review News reported that China has been implementing a strategy to diversify the allocation of its foreign exchange reserves.　　

According to the U.S. Treasury Department on August 16, China had reduced its holdings of U.S. Treasury bonds by $96.2 billion since July 2009.

Japan’s Finance Ministry announced on Aug. 9 that China had purchased 456.4 billion yen (about 5.3 billion U.S. dollars) in Japanese government bonds in June, which means that China has purchased Japanese government bonds for 6 consecutive months. For the first half year of 2010, China purchased a total 1.73 trillion yen in holdings of Japanese government bonds (about 20.2 billion U.S. dollars). Meanwhile, China has increased its holding of South Korea government bonds by 111%, up to 3.99 trillion won (about 3.4 billion U.S. dollars). In mid-July of 2010, the Chinese Administration of Foreign Exchange bought about 400 million euros in Spain’s 10-year bonds.

Source: China Review News, August 24, 2010
http://gb.chinareviewnews.com/doc/1014/2/4/1/101424122.html?coluid=53&kindid=0&docid=101424122&mdate=0824080231

Wang Xiaolu, a scholar at the National Economic Research Institute under the China Reform Foundation, recently published an article that calculates the 2008 urban residents’ “hidden income” to be as high as 9.26 trillion yuan, about 30% of the year’s gross domestic product (GDP). Wang believes that the existence of gigantic amount of “hidden income” or “grey income” shows the severe distortion of the distribution of national income. The sources of the “hidden income” include corruption, and other means of misappropriation of public funds and private wealth.

On August 24 and 25, the National Bureau of Statistics published two articles on its website, confronting Wang’s study by questioning its methodology.

Source: Jinghua Daily, August 26.
http://epaper.jinghua.cn/html/2010-08/26/content_580292.htm
[Editor’s Note: Jinghua Daily is a Beijing local newspaper]