"It's an impending task to establish and improve the primary
social equality guarantee system, considering both per capita
national income and public finance," Professor Wu Zhongmin of the
sociology research section from Chinese Communist Party School told
China Economy Weekly recently.
According to him, investments in the livelihoods of ordinary
people have increased year on year though, the figures for social
security, public education and health respectively occupied 3
percent, 2.9 percent and 2.0 percent of GDP, higher than only a few
countries like Cambodia and Zimbabwe.
At present 87 percent of rural residents have no access to any
health insurance and have to bear high medical expenditure by
themselves, Wu noted. The gap between their income and the costs is
huge.
He also found that expenditure on education, medicine and
housing has ascended rapidly in recent year and accounts for 25
percent of residents' total expenditure. Money spent on education
and health has increased respectively 7 percent and 5 percent
compared with 1997.
Wu pinpointed a paradox in China -- low investment in
people's livelihoods against high administration costs.
Zhou Tianyong, vice director of the Research Section of the
school made a comparison of the financial expenditure between the
Chinese and US governments. In 2004, the administration costs of
China made up 37.6 percent while in the US the figure was just
12.5; on the economy in China it took 11.6 percent, but 5.0 percent
in the US; China spent 25 percent on its public service and social
management and the US figure was 75 percent; on other areas China
devoted 25.8 percent versus the 7.5 percent of the US.
Wu said the administrative expenditure of China was the highest
in the world. Some 300 billion yuan (US$37.5 billion) has been
spent annually on the vehicles of Chinese officials.
"As the market economy is taking up in China, government should
properly fade away in this field and devote more attention to
improving people's livelihoods," stressed Wu.
In the first half year of 2006, the financial income had reached
2 trillion yuan (US$0.25 trillion). Wu said that was a sound
foundation for improving the lives of people.
"About 300 billion yuan, or one tenth of government's revenue, a
year should be enough to guarantee the implementation of the
endeavor," he said.
Professor Wu considered that the expenditure on the primary
social equality guarantee system might comprise following two
parts:
-- About 150 billion yuan (US$18.75 billion) a year in urban
areas. This includes 60 billion yuan (US$7.5 billion) on various
insurances which also cover migrant workers, 20 billion yuan
(US$2.5 billion) on vocational training especially for migrant
workers, 20 billion yuan (US$2.5 billion) for increasing
unemployment insurance; 30 billion yuan (US$3.75 billion) for
enlarging the number of basic living allowance beneficiaries, and
the remaining 20 billion yuan (US$2.5 billion) for further
investment in compulsory education.
-- About 102 billion yuan (US$12.75 billion) a year in rural
areas. The endowment insurance takes 20 billion yuan (US$2.5
billion); health insurance costs 32 billion yuan (US$8 billion);
education expenditure increases by 45 billion yuan (US$5.625
billion); the basic living allowance occupies 5 billion yuan
(US$0.625 billion); and 15 billion yuan (US$1.875 billion) is
required to improve the compensation for bereaved families.
(China.org.cn by Wang Ke, August 9, 2006)