I. Great Achievements Made in Human Resources and Social Security Development 30 Years after Reform and Opening Up

During the 30 years after Reform and Opening Up, great progress has been made in human resources and social security development. A human resources and social security framework that is suitable for the socialist market economy has been by and large established, playing an important role for improving people’s livelihood and maintaining economic and social stability.

(I) Explored employment systems with Chinese characteristics and safeguarded employment in rural and urban areas. A market-oriented employment system has been formed, in which the people have opportunities to choose jobs, the market acts as an “invisible hand”, and the government makes policies to promote employment. The newly added employment and the control of registered unemployment rate in urban areas have been covered by the national macro regulation system, and a public employment service system targeted at laborers in both urban and rural areas has been established. During these 30 years, the number of people employed has been constantly increasing, with optimized employment structure. From 1978 to 2007, the number of employees has increased from 401.52 million to 769.9 million. The proportion of people employed in the primary, secondary and service industry has changed from 70.5 : 17.3 :12.2 to 40.8 : 26.8 : 32.4.

(II) Achieved the transition from insurance provided by employing units to social pooled insurance, and by and large established a social security framework with Chinese characteristics. A system combining the coordination of the state and the personal accounts has been innovatively formed. As for the fund-raising scheme, the state, enterprises and individuals all contribute, a reform of the previous scheme in which only the state contributed. The coverage of social security has been greatly expanded and the level increased. By the end of 2007, the number of people covered by basic pension, primary medical insurance, unemployment insurance, workplace injury insurance and maternal insurance has reached 201.37 million, 223.11 million, 116.45 million, 121.73 million and 77.75 million respectively. Contribution to the funds of the above five social insurance has increased from 162.3 billion in 1998 to 1081.2 billion in 2007, an annual increase of 23.5.%; and total payment has increased from 163.7 billion in 1998 to 788.8 billion in 2007, an annual increase of 19.1%. Social security level has also been steadily increased, with the average monthly pension for retirees of enterprises up from 300 RMB in 1998 to 925 RMB in 2007. Social security management service institutions have been established, greatly reducing the burden of employing units, which previously bore the task of social security.

(III) Reformed the personnel administration system and established a civil service system with Chinese characteristics. Personnel administration system The Civil Service Law of the People’s Republic of China was enacted, greatly promoted the development of civil service system. Both public institutions and enterprises have carried out reforms in their personnel administration systems in accordance with their different needs. The demobilized officer placement system with Chinese characteristics has been formed, with 3.17 million demobilized officers settled within 30 years.

(IV) Improved income distribution system. Income distribution systems conforming to the situation of administrative bodies, public institutions and enterprises have been basically established. Income system for civil servants combining position and rank has been formed. Public institutions have linked salary with performance. During the 30 years, Chinese employees’ salary has sharply increased. In 2007, average salary for urban employees was 24932 RMB, 40.5 times that of 1978, an annual increase of 13.6%.

(V) Great progress made in the training of talents. By the end of 2006, the number of people with professional skills in China has reached 52.239 million, among whom 27.739 worked for state owned enterprises and public institutions, 3.96 times increase from that of 1978. High skilled people working for private sector has risen from zero in 1978 to 24.5 million in 2006. Skillful laborers continue to increase, with the total number by the end of 2007 reaching 98.9 million. Among them 4.29 million were technicians and senior technicians, and 18.1 million were senior laborers. 80 million people across the country have already been granted vocational certificates of various levels. Also, there has been development in attracting foreign human resources to China. We have established long-term cooperation with over 300 institutions in over 60 countries and regions. In 2007, 480,000 foreign experts came to China, a great increase from the first few years after the Reform and Opening Up, when only hundreds of foreign experts come to China each year.

(VI) Strengthened efforts in protecting the legitimate rights and interests of laborers and maintained stable labor relation. Legislation work in the area of labor relation has been greatly promoted. A legal system consisted of the Labor Contract Law, the Law on Employment Promotion, the Law on the Mediation and Arbitration of Labor Disputes as well as supporting laws and regulations have been formed. A tripartite dispute settlement scheme consisted of the employing units and laborers, the society as well as the government has been formed. More and more labor contracts and collective contracts have been concluded, and more attention has been paid to labor inspection and labor dispute arbitration. Altogether, various levels of labor dispute arbitration commission have dealt with 2.54 million cases, involving 6.65 million laborers. Within the 10 years from 1998, all levels of labor inspection institutions inspected 11.07 million employing units and dealt with 2.777 million cases. At the same time, rural migrant workers have gained more guarantees for their rights and interests. Since 2003, 44 billion RMB of salary for rural migrant workers in arrears have been retrieved.

II. Main Tasks of the Ministry of Human Resources and Social Security

According to the State Council Restructuring Plan passed in this March, the Ministry of Human Resources and Social Security was established, in charge of the State Administration of Foreign Expert Affairs and the State Administration of Civil Service. The main responsibilities of the Ministry cover the following two areas. First, social management and public service centering around employment promotion, labor rights protection and social security improvement. Second, public personnel administration focused upon the management of public employees. The main tasks cover the following 8 aspects: employment, labor relation, income distribution, social security, human resources development, civil service management, placement of demobilized officers and attracting foreign human resources.

The following are the current major targets for the Ministry of Human Resources and Social Security: first, promote employment, especially employment promoted by entrepreneurship, help college graduates and people with difficulties in getting re-employed find jobs, and establish a unified and standard human resources market, and develop policies in this regard. Second, establish a social security system covering the greatest majority of both urban and rural residents, and gradually increase the level of social security. Third, maintain harmonious labor relation. Strictly implement the Labor Contract Law and the Law on the Mediation and Arbitration of Labor Disputes, and strengthen efforts in labor inspection. Fourth, improve income distribution system. Focus on both efficiency and fairness and form a rational income distribution system for administrative bodies, public institutions and enterprises. Link income with performance in public institutions, standardize income system for the senior managers of state owned enterprises, and deal with payments in arrears. Fifth, further improve the civil service system, establish supporting laws and regulations for the Law on Civil Service, classify positions for management, and increase moral standards of civil servants. Sixth, strengthen capacity building of human resources, especially the training of high skilled and professional talents. Deepen public personnel administrative reform and establish a scientific personnel appraisal system. Seventh, promote the reform of demobilized officer placement system. Eighth, do a good job in attracting overseas human resources, and improve quality and efficiency of overseas study tours.

III. Work in the Area of Human Resources and Social Security in Response to the Current Economic Situation

Recently, the central government has adopted a series of policies responding to the current economic situation. The Ministry of Human Resources and Social Security will adopt 10 measures in the following 4 aspects.

(I) Stabilize employment situation. First, maintain the current jobs. Adopt unemployment-preventing measures. Ensure that newly unemployed people get their unemployment insurance payments in full and on time. Study the role played by unemployment insurance in economic difficulties. Second, promote employment by all means. Job creation should be the priority when making decisions on government investment and major programs. Support qualified labor-intensive industries, and encourage entrepreneurship. Third, help unemployed laborers and college graduates find jobs, with focus upon implementation of policies as well as well-targeted training and employment service. Fourth, with state investment in employment promotion and unemployment insurance fund, strengthen training for enterprise employees, unemployed workers and rural migrant workers.

(II) Strengthen social security work. First, increase social insurance levels. Do a good job in adjusting basic pension level for people retire in the year 2009. Continue to increase unemployment insurance and workplace injury insurance levels. Second, cover the employees of bankrupted enterprises and retirees of financially challenged enterprises by medical insurance. In urban areas with larger funds, measures can be taken to cut premium for a certain period to reduce the burden of enterprises and individuals.

(III) Stabilize labor relations. First, strengthen guidance and service for enterprises, and establish emergency responding system. Promptly collect the employment information of enterprises, especially labor intensive enterprises, as well as information concerning labor relations in bankrupt or financially challenged enterprises, so as to prevent and properly deal with emergencies. Establish green channels for the prompt mediation and arbitration of labor disputes. Second, properly resolve salary and working hour disputes. The adjustment of the minimum income level has been suspended recently. Permit qualified enterprises, such as outsourcing enterprises to adopt different working hour calculation systems on a case-to-case basis.

(IV) Enhance service for rural migrant workers . First, provide employment service for rural migrant workers, and prevent their blind movement. Promptly collect the employment situation of rural migrant workers. The places accepting rural migrant workers should disclose employment information and register rural migrant workers who lose their jobs half a year after employment, and provide subsidy for qualified migrant workers. The source place of migrant workers should strengthen employment trainings, with the support of local labor and social security departments, and provide service for their entrepreneurship when they come back. Second, protect the legitimate rights and interests of rural migrant workers. Properly resolve labor disputes between bankrupt enterprises and rural migrant workers, and strengthen efforts in retrieving salary in arrears as a priority.